AmTrust Invests in JV to acquire GMAC's U.S. insurance unit

 

Tuesday, Oct 20,2009, 8:30:36 PM   Click:

AmTrust Financial Services has entered into an agreement to make a strategic investment in American Capital Acquisition or ACTA, in connection with the acquisition by the CAAC Consumer Goods GMAC U.S. and casualty insurance business. AmTrust will initially invest approximately $ 42.5 million in convertible preferred securities.

AmTrust Financial said the investment includes 10 insurance companies that write the legal coverage GMAC auto.

The acquisition is subject to regulatory approval and is expected to close in the first quarter of 2010.

Barry Zyskind, president and CEO of AmTrust, said: "The investment is not only a very attractive investment for preferred shares AmTrust, but it provides very good strategic advantages as well. Initially, it gives us immediate access to a new force of 10,500 distribution agents who will be equipped to cross-sell our products AmTrust.

"In addition, the investment will generate substantial fee income for AmTrust, both in developing our platform and unique services to asset management, and generate profits through the Agreement proposed reinsurance underwriting. "