-=Yum China Holdings (YUMC) to be acquired by private equity?

HONG KONG (Reuters) - Investment firms are exploring a buyout of Yum China Holdings Inc. in what could be one of Asia's biggest M&A deals this year, sources close to the situation told Reuters.

Yum China, which has a current market cap of $13 billion, was spun off from the KFC and Pizza Hut owner Yum Brands! Inc in 2016 and later listed on the New York Stock Exchange.

The firm itself has been discussing internally about switching to the Hong Kong bourse for a listing, because of the city's proximity to the Chinese market, potentially higher valuation and its convenient timezone for executives, a separate source with knowledge of the plan told Reuters.

Chinese investment firm Hillhouse Capital Group is planning to lead a consortium to buy the KFC and Pizza Hut operator in China, said four of the people. The firm, which has received commitments of over $10 billion for a new fund, has tapped lenders for potential financing of the deal and other investors to join them in the bid, two of them said.

Global investment house KKR & Co and Hong Kong-based regional firm Baring Private equity Asia are also weighing up investing in the buyout, according to two sources, who added that no final decision has been made.

Bloomberg first reported on investors in the Yum China buyout on Tuesday. The report said Chinese sovereign fund China Investment Corp (CIC) and DCP Capital, the investment firm run by former KKR & Co. senior executives, are part of the Hillhouse consortium, adding that Primavera Capital Group, a current investor in Yum China, could also join the bidding group.

Reuters could not independently verify if the investors are all working as one bidding group. A separate source with knowledge of the situation said there could be more than one consortium of bidders.

A spokesman for Yum China said the company does not comment on market rumours or speculation when asked about the buyout intent and the Hong Kong listing plan. Yum Brands did not immediately respond to a request for comment.

Hillhouse and Baring declined to comment. KKR, CIC, DCP and Primavera did not immediately respond to requests for comments.

Chinese investment firm Primavera Capital and Ant Financial Services Group bought a minority stake in Yum China for $460 million as part of the spin-off deal in September 2016. Both are still shareholders in the company. Ant declined to comment.

Two sources said a KKR-led consortium, which included Baring, CIC and Chinese investment firm Hopu Investments, had discussions with Yum Brands! about taking a controlling stake in its China business two years ago but failed to get a deal done.

Yum China shares are down 15 percent this year but its Monday's closing price - $34.22 per share, is still above its listing price at $24.51 on Nov. 1 2016. It has lost about $1 billion in market cap since reports about the potential buyout first came out in late July.

Its second-quarter net income increased 13 percent year-on-year but Pizza Hut continued to face challenges in China's competitive casual dining space, its CEO said on Aug. 1.

Former Yum China chairman and chief executive officer Sam Su, who was pivotal in the company's expansion in China, now serves as an operating partner at Hillhouse Capital.

=Genworth Financial (GNW) :U.S. security panel approves purchase by Oceanwide

Genworth Financial receives approval from CFIUS to move forward with proposed China Oceanwide and Genworth Financial transaction  

• China Oceanwide Holdings Group Co and Genworth Financial announced that the Committee on Foreign Investment in the United States (CFIUS) has completed its review of their proposed transaction and concluded that there are no unresolved national security concerns with respect to the proposed transaction. This satisfies one of the conditions to the closing of the proposed transaction.
• In connection with the CFIUS review of the proposed transaction, Genworth and Oceanwide entered into a mitigation agreement which, among other things, requires Genworth to use a U.S.-based, third-party service provider to manage and protect the personal data of Genworth's U.S. policyholders.
• The closing of the transaction remains subject to other conditions, including the receipt of required regulatory approvals in the U.S., China and other international jurisdictions. Genworth and Oceanwide are engaging with the relevant regulators regarding the pending applications.

=Genworth Financial (GNW) reported earnings on Tue 6 Feb 2018 (a/h)

• Genworth Financial posts 4Q profit

RICHMOND, Va. (AP) _ Genworth Financial Inc. (GNW) on Tuesday reported fourth-quarter net income of $353 million, after reporting a loss in the same period a year earlier.

On a per-share basis, the Richmond, Virginia-based company said it had net income of 70 cents. Earnings, adjusted for non-recurring gains, came to 65 cents per share.

The financial services company posted revenue of $1.69 billion in the period. Its adjusted revenue was $1.64 billion.

For the year, the company reported net income of $817 million, or $1.63 per share, swinging to a profit in the period. Revenue was reported as $8.3 billion.

• Genworth, Oceanwide renew application for $2.7 bln merger assent

NEW YORK, Feb 6 (Reuters) - Genworth Financial Inc said Tuesday its application for assent to a takeover by China Oceanwide Holdings Group Co Ltd had been refiled, after agreeing changes the duo hope will alleviate U.S. regulatory concerns.

The transaction, first announced in October 2016 and valuing the U.S. insurer at $2.7 billion, has been repeatedly delayed by an inability to secure the approval of the Committee on Foreign Investment in the United States (CFIUS), which screens foreign takeovers of American companies for national security issues.

While CFIUS has not killed all deals involving Chinese buyers in recent times - at least a handful were approved in 2017 - the panel has been increasingly skeptical of Chinese transactions under the administration of President Donald Trump.

Genworth and Oceanwide had refiled their CFIUS application and provided the group with "detailed information about an additional data security risk mitigation proposal involving a U.S. third-party service provider", according to Genworth's fourth-quarter earnings statement.

It provided no further information on what the data security measures entail. Analysts have said previously that CFIUS is likely concerned by the prospect of potential access by Chinese state actors to Americans' personal information.

Genworth also said Tuesday that it would seek secured debt to address an upcoming maturity, given the delay in securing approval for the acquisition, with further details to be announced "upon the planned launch in the near future".

The insurer had warned in October it was evaluating options, including asset sales and debt refinancing, to address around $600 million of debt coming due in May 2018.

It is the third refiling of the CFIUS application by Genworth and Oceanwide. The government body has 75 days from the submission date to approve the deal, although if no conclusion is reached in that time then the merging parties can withdraw and refile their application and start a new 75-day clock.

Syngenta (SYT) reported earnings on Wed 8 Feb 2017 (b/o)

** charts before earnings **

 

** charts after earnings **

Syngenta beats by $0.65; revs in-line; sees merger with ChemChina closing in Q2:

Reports FY16 EPS of $17.03 vs $16.38 Capital IQ consensus; revs declined 5% YoY to $12.79 bln vs $12.79 bln consensus (2% lower at constant exchange rates)

Merger update

• ChemChina transaction expected to close in Q2 of 2017 AGM scheduled in June; no regular dividend proposed

    

*****

Chinese state-owned Sinochem and ChemChina are in merger talks to create the world's biggest industrial chemicals firm, to be headed by Sinochem chief Ning Gaoning.

A deal could be announced by the end of the year, potentially just months after ChemChina completes its own $43 billion purchase of Switzerland's Syngenta (SYT), China's biggest overseas deal to date.

Beijing sees a Sinochem/ChemChina deal as a blueprint for streamlining and consolidating its sprawling, debt-heavy state-owned enterprises,  leaving fewer, but more powerful, national champions.

A deal is not yet final, and China's 19th Communist Party Congress later this year leaves room for some political uncertainty.

The expected retirement of ChemChina chief Ren Jianxin in January may speed up the process, one of the people said, to allow for a handover period.

Ren, known for bold deals including Syngenta and the purchase of Italian tyremaker Pirelli, has spent over a decade and billions of dollars expanding ChemChina, founding a popular noodle chain along the way.