Alleghany provides to Berkshire’s already giant insurance coverage portfolio, which incorporates Geico auto insurance coverage, Normal Re reinsurance and a unit that insures in opposition to main and strange dangers.
Based in 1929 by railroad entrepreneurs Oris and Mantis Van Sweringen, New York-based Alleghany operates primarily in property and casualty reinsurance and insurance coverage by way of subsidiaries and investments.
Alleghany was reworked from a largely railroad holding firm into an insurance coverage and funding agency by Fred Morgan Kirby II. The corporate’s board is presently led by Jefferson Kirby.
“Berkshire would be the excellent everlasting house for Alleghany, an organization that I’ve intently noticed for 60 years,” Berkshire Hathaway’s Chairman and Chief Govt Warren Buffett mentioned in an announcement on Monday.
“All through 85 years the Kirby household has created a enterprise that has many similarities to Berkshire Hathaway,” Buffett mentioned.
Buffett had pledged in February to maintain greater than $30 billion of money readily available, leaving loads obtainable for the appropriate acquisition.
Alleghany’s insurance coverage holdings additionally embrace RSUI Group, an underwriter of wholesale specialty insurance coverage, and CapSpecialty, a specialty insurance coverage firm.
Berkshire Hathaway provided $848.02 for every share of Alleghany, a premium of greater than 25% to the corporate’s closing worth on Friday.
The deal is anticipated to shut within the fourth quarter of 2022 and Alleghany will function as an unbiased unit of Berkshire Hathaway after closing.
Goldman Sachs suggested Alleghany on the deal.
