Assurant, a leading provider of insurance-related products and services, has signed a definitive agreement to acquire GE consumer & industrial's warranty management group (WMG), which markets and sells extended warranties and service contracts for major appliances and consumer electronics.
As part of the $140 million cash deal, Assurant will also enter into a new 10-year agreement to market extended warranties and service contracts on GE-branded major appliances domestically.
The agreement comes as GE looks to spin off the consumer & industrial unit, which makes and markets major appliances, lighting products, and integrated electrical distribution equipment and systems.
Assurant Solutions, the insurer's extended-warranty unit, first entered into an alliance with GE's major appliance division in 2003. Under that agreement, Assurant offered extended warranties directly to GE appliance purchasers and through leading retailers for consumer electronics, computers, appliances, and other products and services.
Under the terms of the new agreement, Assurant will assume full responsibility for operating the extended-warranty business it previously co-managed and shared with GE. GE factory service technicians will continue to provide in-home service on the Assurant extended warranties sold with GE appliances, the partners said.
As part of the transaction, GE will also pay Assurant $115 million in cash for the assumption of certain obligations.
"This agreement strengthens Assurant's leadership in the service contract market and enhances our ability to integrate the value chain and provide a broader solution to our clients," said Craig Lemasters, president/CEO of Assurant Solutions. "Assurant and GE share a common, customer-centric approach and we are committed to making this transaction seamless to our customers. Current extended-warranty customers will continue to receive the same high-quality services and extended-warranty protection they have come to expect."
The acquisition is expected to close in the third quarter of 2008 subject to regulatory approvals.