Berkshire Hathaway Inc (NYSE:BRK.B), the investment giant run by Warren Buffett, has agreed to acquire insurer and reinsurer Alleghany Corporation $11.6bn.
As part of the definitive agreement between the two firms, Berkshire will purchase all outstanding Alleghany shares for $848.02 in cash.
The transaction has been approved unanimously by both boards of directors, representing a total equity value of approximately US$11.6bn. Alleghany's book value as of December 31st, 2021 represents a multiple of 1.26x.
Alleghany's acquisition price is also 29% higher than Alleghany's average stock price over the last 30 days and 16% higher than Alleghany's 52-week high closing price.
Through the definitive merger agreement, Berkshire will be able to expand its significant positions in the insurance and reinsurance markets. It will also include Alleghany's reinsurance entity, TransRe.