Berkshire Hathaway To Acquire Alleghany Corporation For $11.6 Billion

Berkshire Hathaway and Alleghany Corporation, on March 21, 2022, entered into a definitive agreement for which Berkshire is set to acquire Alleghany in cash for $842.02 per share. The deal was concertedly approved by both parties and is expected to have a total equity value of approximately $11.6 billion. “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. I am particularly delighted that I will once again work together with my long-time friend, Joe Brandon,” said Warren Buffett, Berkshire Hathaway’s Chairman and CEO.

Berkshire Hathaway said the deal includes a 25-day period (“go-shop”) under which Alleghany can seek a better offer subject to the terms and conditions of the mergers agreement.

According to Businesswire, Alleghany Corporation owns operating subsidiaries and manages investments, anchored by a core position in property and casualty reinsurance and insurance. Alleghany’s property and casualty subsidiaries include: Transatlantic Holdings, Inc., a leading global reinsurer; RSUI Group, Inc., which underwrites wholesale specialty insurance coverages; and CapSpecialty, Inc., an underwriter of specialty casualty and surety insurance coverages. Alleghany’s subsidiary Alleghany Capital Corporation owns and supports a diverse portfolio of eight non-financial businesses.

Alleghany will become part of Berkshire’s large insurance portfolio after the closure of the deal expected to happen in the fourth quarter of 2022. According to the agreement, Alleghany will continue to operate as an independent subsidiary of Berkshire Hathaway. 

“My family and I have been significant shareholders of Alleghany for over 85 years and are proud that our ownership will culminate through this compelling transaction with Berkshire Hathaway. Not only does this deal provide substantial and certain value to stockholders, but it provides a rare opportunity to join forces with a like-minded and highly respected investor and business leader,” said Jefferson Kirby, Chair of the Alleghany Board of Directors. 

The acquisition is one of Berkshire’s biggest among the $37.5 billion acquisition of Precision Castparts in 2016. Alleghany CEO Joseph Brandon applauded the deal and termed it a “terrific transaction.” “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,” added Brandon.