Specialty insurer Assurant Inc. has agreed to acquire the warranty management business of General Electric Co.'s appliance and consumer electronics division.
Under the formal accord with GE Consumer & Industrial, Assurant said Thursday it also will enter into a 10-year agreement to market extended warranties and service contracts on GE-branded major appliances in the United States.
Assurant will pay GE $140 million in cash for the sale and transfer of certain assets and will assume certain liabilities, the New York-based insurer said in a news release. GE, for its part, will pay Assurant $115 million in cash in return for Assurant assuming some debts.
Assurant said it expects the acquisition to be completed in the third quarter, subject to approval by regulatory authorities, and to add to its earnings next year.
GE and Assurant entered into an alliance in 2003 in which Assurant offered extended warranties directly to purchasers of GE appliance and through major retailers for consumer electronics, computers, appliances and other goods and services. Under the new agreement, Assurant said, it will assume full responsibility for operating the extended-warranty business it previously shared with GE.
The new terms also call for GE factory service technicians to continue to provide in-home service on the Assurant extended warranties sold with GE appliances.
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