Warren Buffet’s Berkshire Hathaway to purchase insurance firm Alleghany for $11.6B

Berkshire Hathaway announced it had agreed to buy insurance company Alleghany for $11.6 billion, at $848.02 per share, in cash, as 91-year old Warren Buffet returns to deal-making after a hiatus in recent years.

In a statement, Berkshire Hathaway said that the deal represents a 29% premium to Alleghany’s average stock price in the last 30 days and a 16% premium to Alleghany’s 52-week high closing price.

The New York-based Alleghany is involved in various insurance businesses through its many subsidies, including wholesale specialty, reinsurance, and property and casualty.

Warren Buffet, Chairman and CEO of Berkshire, said Berkshire Hathaway would be the perfect permanent home for Alleghany, a firm he had closely observed over the past 60 years.

Alleghany adds to Berkshire Hathaway’s already extensive insurance portfolio, including General Re reinsurance, Geico Auto insurance, and a unit that insures against unusual and significant risks.

Joseph Brandon, CEO of Alleghany, hailed the firm’s purchase as a terrific deal for the insurance firm’s owners, customers, businesses, and employees. He added that the deal’s value reflects the quality of the firm’s franchises and is the product of Alleghany’s team’s persistence, hard work , and determination over the past decades.