The deal clears the way for China Oceanwide to purchase Genworth.

Brookfield Business Partners announced plans to purchase a 57% stake in Genworth Financial’s Canadian mortgage insurance unit.

According to terms of the deal, the stake is worth roughly $1.81 billion. Brookfield purchased 4.9 million common shares of Genworth MI Canada stock for CAD$48.86 per share. The firm now owns a majority stake in Canada’s largest private mortgage provider.

“Genworth is an industry-leading business that generates strong, consistent earnings and operates in a sector with high barriers to entry,” said David Nowak, managing partner, Brookfield Business Partners, in a statement announcing the deal.

As a result, Genworth’s sale of the mortgage division clears the path for its acquisition by China Oceanwide Holdings Group. Genworth has been working since 2016 to gain approval for the $2.7 billion buyout.

Brookfield Business Partners Locks Up Deal

In a statement, the companies said that the deal will likely close by the end of the year. It will also require approval under the Insurance Companies Act (Canada) and Competition Act (Canada). Should regulators not approve the deal by October 31, Brookfield has agreed to offer up to $850 million in bridge financing.

In a statement, Genworth leadership praised the deal on behalf of shareholders.

“We are pleased to find such a high-caliber buyer for our interest in Genworth Canada,” said Tom McInerney, president and CEO of Genworth Financial.  “We look forward to working with Brookfield Business Partners through the sale process and required regulatory approvals and, ultimately, moving forward with our long-awaited closing of our merger with Oceanwide.”

Goldman Sachs and Lazard Frères acted as financial advisors to Genworth. BFIN Securities, BMO Capital Markets, CIBC Capital Markets, RBC Capital Markets helped to advise Brookfield Business Partners.