NEW YORK (TheStreet) -- Shares of Genworth Financial (GNW) - Get Report were down 7.20% to $4.84 on heavy trading volume early-morning Monday as China Oceanwide agreed to purchase the long-term care insurance company for $2.7 billion, or $5.43 per share in cash.
The deal is expected to close by the middle of 2017, Richmond, VA-based Genworth said in a statement.
As part of the acquisition, privately-held China Oceanwide will contribute $600 million in cash to address Genworth's debt maturing in 2018, as well as $525 million in cash to its life insurance business.
"In acquiring Genworth and contributing $1.1 billion of additional capital, we are providing crucial financial support to Genworth's efforts to restructure its U.S. life insurance business...," said Lu Zhiqiang, China Oceanwide's chairman, in a statement.
China Oceanwide controls several properties throughout China and has since expanded to investing in U.S. commercial real estate, the Wall Street Journal reports.
Genworth was one of the mortgage insurers impacted the most by the financial crisis, as homeowners defaulted on mortgages and then faced foreclosures.
The insurer's long-term care business has also suffered as a result of low interest rates, causing the company to cut costs in recent years.
Genworth in 2015 reported more than $2 billion in losses on long-term care policies, according to the Journal.
About 16.44 million shares of Genworth have traded so far today vs. the 30-day average volume of 7.28 million shares.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
The team rates Genworth Financial as a Sell with a ratings score of D+. Among the areas the team feels are negative, one of the most important has been poor profit margins.
You can view the full analysis from the report here: GNW