Assurant (AIZ) to Acquire General Electric's (GE) Warranty Management Group Business; Sees Deal Accretive to 2009 Earnings

September 4, 2008 4:21 PM EDT

Assurant, Inc. (NYSE: AIZ) has signed a definitive agreement with GE Consumer & Industrial, a unit of General Electric (NYSE: GE), for Assurant to acquire GE's Warranty Management Group (WMG) business, a unit that markets and sells extended warranties and service contracts for major appliances and consumer electronics. As part of the definitive agreement, Assurant will also enter into a new 10-year agreement to market extended warranties and service contracts on GE-branded major appliances domestically.

Under terms of the agreement, Assurant will pay GE $140 million in cash for the sale, transfer, and conveyance of certain assets and will assume certain liabilities. As part of the transaction, GE will pay Assurant $115 million in cash for the assumption of certain obligations.

Assurant expects that the acquisition will be accretive to earnings in 2009. Assurant has provided the underwriting in its existing partnership with GE. Therefore, the acquisition will not change Assurant's reported premiums. The acquisition is expected to close in the third quarter of 2008 subject to customary regulatory approvals.[SM]

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