Warren Buffett announced a massive $11 billion acquisition Monday, the largest deal in roughly five years.
Berkshire Hathaway said Monday it agreed to an all-cash purchase of insurance company Alleghany for $11.6 billion, or $848.02 per share. Alleghany will continue to operate independently of Berkshire Hathaway until the sale is completed.
The acquisition, which is expected to be completed by the end of 2022, is Berkshire’s largest acquisition since 2016 when the company purchased Precision Castparts for $37 billion, CNBC reported.
“Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years,” Buffett said in the press release.
“Throughout 85 years, the Kirby family has created a business similarities to Berkshire Hathaway,” Buffett said, adding that he is excited to work with Alleghany President and Chief Executive Officer Joseph P. Brandon.
Warren Buffett (L), CEO of Berkshire Hathaway, and vice chairman Charlie Munger attend the 2019 annual shareholders meeting in Omaha, Nebraska, May 3, 2019. (Photo credit JOHANNES EISELE/AFP via Getty Images)
Alleghany is known for its core property and casualty insurance businesses and has also developed a portfolio of noninsurance companies, similar to Berkshire Hathaway, the Wall Street Journal reported. Berkshire already owns a broad portfolio of insurance companies, including Geico. (RELATED: 90-Year-Old Billionaire Warren Buffett Resigns From Gates Foundation)
“This is a terrific transaction for Alleghany’s owners, businesses, customers, and employees,” Brandon said.
“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,” Brandon added. “As part of Berkshire Hathaway, which epitomizes our long-term management philosophy, each of Alleghany’s businesses will be exceptionally well-positioned to serve its clients and achieve its full potential.”
Berkshire said the deal includes a 25-day “go-shop” period where Alleghany can look for a better offer.
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