Genworth Financial, Genworth MI Canada and China Oceanwide Holdings – What can happen in a merger?

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Genworth Financial (NYSE: GNW) is trying to merge with China Oceanwide Holdings. MIC is causing issues because whatever approval they need from the Canadian business side of things is being held up. My question is what generally happens to an investment when a merger like this happens? Does the new company still run things as they were before, or do they mess around with operations? I’m asking because I don’t think this Chinese company pays dividends. Do companies that don’t pay dividends to their own shareholders generally cut the dividends to shareholders when they merge or take another company over? What could happen here to investors? Thanks!

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Asked on September 18, 2020 9:33 pm
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Hi there.

There are so many variables and factors that can contribute to 'what can happen'. I haven't read into the details thoroughly, but I believe Oceanwide is buying GNW which means that GNW will likely stop trading. This isn't a 'merger' per say, more of an acquisition. In t

In this event,investors would receive $5.43 per GNW share - i do not believe MIC is a part of this transaction - and GWN would cease trading. This is what would happen to investors.

In a true merger, where two companies merge into one, than there is usually details as to who the controlling party is within the body of the release. Usually, the Boards also combine and the end result is a mix of management from both companies. They will continue trading under one symbol or the other, and shareholders would then hold stock in that new company.

Mat

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Posted by Mathieu Litalien
Answered on September 19, 2020 8:09 am
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