Berkshire Hathaway is Acquiring Insurance Company Alleghany

Mar 21, 2022 By MarketDepth

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Warren Buffett’s holding company, Berkshire Hathaway (NYSE: BRK.A), is acquiring insurance company Alleghany for a total of USD11.6 Billion or USD848.02 per share, in cash. According to the company, the deal “represents a multiple of 1.26 times Alleghany’s book value at December 31, 2021,” and a 16% premium to Alleghany’s average stock price in the last 30 days. The deal is anticipated to close within the fourth quarter of 2022.

Stock Up Premarket

Alleghany shares skyrocketed over 15% during premarket trading upon the news of the upcoming acquisition.

“Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years. Throughout 85 years the Kirby family has created a business that has many similarities to Berkshire Hathaway.”

Buffett said in a statement

Insurance is one of Berkshire’s main businesses, as it already owns Geico auto insurance, General RE reinsurance among others, which have been incentivizing growth within recent years.

“terrific transaction for Alleghany’s owners, businesses, customers, and employees. The value of this transaction reflects the quality of our franchises and is the product of the hard work, persistence, and determination of the Alleghany team over decades.”

Alleghany CEO Joseph Brandon

Alleghany is being advised by Goldman Sachs as well as Wilkie Farr & Gallagher throughout the transaction.