Brookfield Business Partners has agreed to buy nearly 57% stake in Genworth MI Canada from Genworth Financial in a C$2.4bn ($1.8bn) deal.

The acquisition of 57% controlling stake equates to 48,944,645 common shares of Genworth MI Canada.

Brookfield Business Partners will acquire the shares from Genworth Financial International Holdings (GFIH) and Genworth Mortgage Insurance Corporation (GMIC).

Both of the firms are wholly-owned indirect subsidiaries of Genworth.

Through its subsidiary Genworth MI Canada, Genworth offers mortgage default insurance to residential mortgage lenders in the country.

Brookfield Business Partners managing partner David Nowak said: “We are very pleased to make this investment in Genworth Canada, a high-quality leader in the mortgage insurance sector.

“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.”

Of the total $1.8bn deal value, Brookfield will pay about $700m on closing of the transaction while the remaining amount will be co-invested by Brookfield and certain of its institutional partners.

Additionally, the acquirer will provide a bridge loan of up to $850m to Genworth Financial. The loan will be repaid from the income earned from the divestiture of its interest in Genworth Canada.

Subject to receipt of regulatory approvals, the transaction is scheduled to be completed in the second half of 2019.

The disposal of Genworth Canada will improve the subsequent chances of the acquisition of Genworth by China-based Oceanwide Holdings Group and its affiliates.

Oceanwide has given its approval for the deal. Subsequently, both Genworth and Oceanwide have signed the 12th Waiver and Agreement extending the merger agreement deadline by 2019-end.