The deal will see Brookfield take the majority of shares in the mortgage giant

Brookfield Business Partners reached an agreement to buy a controlling stake in Canada’s largest private mortgage insurer.

Brookfield said it would pay $1.8 billion for a 57% stake in Genworth Canada, according to the press release.

The sale further increases the chance of Genworth finishing its sale of the rest of the company to China Oceanwide Holdings that requires regulatory approval. Genworth has been trying to close the deal with Oceanwide Holdings since 2016. However, they have struggled with losses related to their long-term care insurance policies.

Terms of the Brookfield Business Partners Deal

The firm will put up about $700 million of its own money for the transaction. It will then raise the rest from several partners they have lined up. The firm is also providing an $850 million bridge loan for Genworth until the transaction closes.

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

Genworth Canada should align with Brookfield Business Partners. The latter’s Brookfield Asset Management has extensive experience in real estate and financial services.

“We are very pleased to make this investment in Genworth Canada…” said David Nowak, Managing Partner, Brookfield Business Partners. “Genworth is an industry-leading business that generates strong, consistent earnings and operates in a sector with high barriers to entry. We look forward to partnering with management to support its ongoing success, drawing on our expertise in insurance and residential real estate.”

Finally, Canadian regulators still must approve the deal, which will close in the second half of 2019.