Warren Buffett picked the industry he arguably knows best, insurance, for his first major deal in two years.
The $848.02 per share price is 1.26 times book value as of Dec. 31 and a 29% premium to its average price over the last 30 days, the companies said. Alleghany shares ended Friday at $676.75.
The deal allows Alleghany to actively solicit and consider alternative acquisition proposals during a 25-day “go-shop” period.
The $11.6 billion acquisition, if successful, will be Berkshire Hathaway’s largest deal since its $34.6 billion acquisition of Precision Controls, that completed in 2016. A more recent billion-dollar deal was the $8 billion acquisition of Dominion Energy’s gas transmission and storage deal in 2020.
Berkshire Hathaway recently disclosed it had $144 billion in cash. “These periods are never pleasant; they are also never permanent,” Buffett said in his most recent annual letter to shareholders.