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Alleghany adds to Berkshire's already large insurance portfolio,
which includes Geico auto insurance, General Re reinsurance and
a unit that insures against major and unusual risks.
Founded in 1929 by railroad entrepreneurs Oris and Mantis Van
Sweringen, New York-based Alleghany operates mainly in property
and casualty reinsurance and insurance through subsidiaries and
investments.
Alleghany was transformed from a largely railroad holding
company into an insurance and investment firm by Fred Morgan
Kirby II. The company's board is currently led by Jefferson
Kirby.
"Berkshire will be the perfect permanent home for Alleghany, a
company that I have closely observed for 60 years," Berkshire
Hathaway's Chairman and Chief Executive Warren Buffett said in a
statement on Monday.
"Throughout 85 years the Kirby family has created a business
that has many similarities to Berkshire Hathaway," Buffett said.
Buffett had pledged in February to keep more than $30 billion of
cash on hand, leaving plenty available for the right
acquisition.
Alleghany's insurance holdings also include RSUI Group, an
underwriter of wholesale specialty insurance, and CapSpecialty,
a specialty insurance company.
Berkshire Hathaway offered $848.02 for each share of Alleghany,
a premium of more than 25% to the company's closing price on
Friday.
The deal is expected to close in the fourth quarter of 2022 and
Alleghany will operate as an independent unit of Berkshire
Hathaway after closing.
Goldman Sachs advised Alleghany on the deal.
(Reporting by Noor Zainab Hussain and Mehnaz Yasmin in Bengaluru;
Editing by Aditya Soni and Saumyadeb Chakrabarty)
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