By Denny Thomas and Julie Zhu

HONG KONG (Reuters) - Little-known China Oceanwide Holdings Group Co pledged $3.8 billion in a deal to take control of U.S. insurer Genworth Financial Inc <GNW.N>, the latest marker of Chinese firms accelerating a drive overseas while their domestic economy slows and the yuan weakens.

Founded by low-profile but well-connected billionaire Lu Zhiqiang, the Beijing-based investment firm agreed to pay $2.7 billion in cash to buy all Genworth shares, the firms said in a statement on Sunday. The price offers a modest 4.2 percent premium to Genworth's Friday closing price.

Oceanwide also committed another $1.12 billion to cover Genworth debt maturing in 2018, as well as life insurance claims charges faced by the firm spun out of General Electric <GE.N> in 2004. Genworth has seen its share price fall nearly two-thirds in the last 24 months while battling low interest rates and trying to stabilize its troubled long-term health insurance arm.

Both firms' boards backed the deal, reached after two years' "extensive review" by Genworth's board. But the transaction remains subject to regulatory approvals, and likely won't close before mid-2017, they said, without disclosing the exact source of the deal's funding.

The striking of a near-$4 billion deal by an unlisted Chinese firm that few outside the country know highlights how determined mainland buyers have become in a hectic year for chasing overseas assets. So far, 2016 has seen Chinese firms launch a record $181 billion of overseas mergers and acquisitions - about 70 percent more than the whole of last year.

Chinese investment holding firms have joined insurers like Fosun International Ltd <0656.HK> and unlisted Anbang Insurance Group in leveraging accumulated capital to buy global assets. Some recent purchases have also come from Chinese property companies, keen to reduce reliance on their home market.

Some recent Chinese bids have attracted intense regulatory scrutiny overseas. But rarely has an insurance deal by a Chinese acquirer been blocked outright by international watchdogs, according to people familiar with these transactions.

LU WORTH $5.3 BLN - FORBES

Founded by Lu in 1985, Oceanwide - described by Genworth President & Chief Executive Officer Tom McInerney as "an ideal owner" going forward - is also the controlling shareholder of Hong Kong-listed China Oceanwide Holdings Ltd <0715.HK>, worth about $1.6 billion by market value.

Lu, born in 1951, has risen through the ranks of Chinese business and officialdom quietly but efficiently. China Oceanwide's operations now span financial services, energy, culture and media, and real estate assets globally, employing more than 10,000 employees worldwide.

After a job in a diesel engine factory as a teenager, according to official news agency Xinhua, Lu worked in local government, graduated from the prestigious Fudan University and became vice-president of the China Non-governmental Chamber of Commerce while building up his business. Forbes magazine estimates his net worth stands at $5.3 billion.

Genworth's McInerney said the capital commitment from China Oceanwide would strengthen Genworth's business - increasing the likelihood of obtaining regulatory approval. Genworth intends to maintain its existing portfolio of businesses, including its mortgage insurance businesses in Australia and Canada.

Analysts reckoned the comparatively low per-share premium China Oceanwide is paying reflects Genworth's upcoming gloomy business outlook.

"We believe the company's (Genworth) shares would have traded significantly lower than the level at which they closed on Friday," broker BTIG wrote in a note to clients, citing charges at the firm's long-term care unit.

While China Oceanwide is paying only a modest per-share premium, some Chinese buyers have been paying top-dollar to secure insurance assets.

Earlier this year, comparatively unknown mainland firm Thaihot Group <000732.SZ> paid nearly three times Dah Sing Financial Holdings Ltd's <0440.HK> 2015 embedded value in a $1.4 billion deal - more than double the valuation at which a previous Hong Kong insurance deal was done.

Goldman Sachs <GS.N> and Lazard <LAZ.N> are acting as financial advisors to Genworth. Citigroup <C.N> and Willis Capital Markets & Advisory are acting as financial advisors to China Oceanwide, according to the statement.

(Reporting by Denny Thomas and Julie Zhu; Editing by Kenneth Maxwell)