January 31, 2023

Warren Buffett's Berkshire Hathaway agrees to buy Alleghany insurer for $11.6 billion

Warren Buffett’s Berkshire Hathaway agrees to buy Alleghany insurer for $11.6 billion

Warren Buffett at Berkshire Hathaway’s annual meeting in Los Angeles, California. May 1, 2021.

Gerard Miller | CNBC

Warren Buffett is taking steps.

Berkshire Hathaway It said Monday morning that it had agreed to buy Richie’s insurance company for $11.6 billion, or $848.02 per share in cash. The group said the deal “represents Alghani’s book value by 1.26 times on December 31, 2021,” as well as a 16% premium over the average share price of Alghani’s company in the past 30 days. The deal is expected to close in the last quarter of this year.

the rich Shares rose more than 15% in Premarket. Through its subsidiaries, the Ghanaian is involved in a number of different insurance companies, including the wholesaling specialty, property, casualty and reinsurance.

“Berkshire would be the perfect permanent home for Alleghany, a company I’ve been watching closely for 60 years,” BuffettChairman and CEO of Berkshire Corporation, in a statement.

Joseph Brandon, CEO of Al Ghani Corporation – who previously led a Berkshire-owned General Company – hailed the deal as “a fantastic deal for Al Ghani’s owners, companies, customers and employees,” noting that “the value of this transaction reflects the quality of our franchises and is the product of the hard work, perseverance and determination of the Ghanaian team to over decades.”

The deal may surprise some Berkshire shareholders, as Buffett and his right-hand man – Vice President Charlie Munger – have expressed frustration in their search for a major acquisition. In his 2022 annual letter to shareholders, Buffett said he found her and Munger The little that “excites” them in terms of big acquisitions.

To be sure, $11.6 billion is a small number compared to Berkshire’s massive cash stock of $146.72 billion at the end of 2021.

Adam Crisavoli of Vital Knowledge said in a note.

Monday’s deal comes after Berkshire’s top-tier shares hit a record high last week, Close above $500,000 for the first time.