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

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

Gerard Miller | CNBC

Warren Buffett is making strikes.

Berkshire Hathaway mentioned Monday morning it agreed to purchase insurance coverage firm Alleghany for $11.6 billion, or $848.02 per share, in money. The conglomerate mentioned the deal “represents a a number of of 1.26 instances Alleghany’s e-book worth at December 31, 2021,” in addition to a 16% premium to Alleghany’s common inventory value up to now 30 days. The deal is anticipated to shut within the fourth quarter of this 12 months.

Alleghany shares rallied greater than 15% within the premarket.

“Berkshire would be the excellent everlasting house for Alleghany, an organization that I’ve carefully noticed for 60 years,” Buffett, Berkshire’s chairman and CEO, mentioned in an announcement.

Alleghany CEO Joseph Brandon hailed the deal as a “terrific transaction for Alleghany’s homeowners, companies, prospects, and staff,” noting that “the worth of this transaction displays the standard of our franchises and is the product of the laborious work, persistence, and willpower of the Alleghany staff over many years.”

The deal might shock some Berkshire shareholders, as Buffett and his right-hand man — vice chairman Charlie Munger — have expressed frustration of their seek for a giant acquisition. In his 2022 annual letter to shareholders, Buffett mentioned he and Munger discovered little that “excites” them when it comes to massive acquisitions.

To make certain, $11.6 billion is a small quantity compared with Berkshire’s huge money hoard of $146.72 billion on the finish of 2021.

That is breaking information. Please verify again for updates.

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