After six-years away from blockbuster deals Warren Buffet’s Berkshire Hathaway announced it would buy New York-based insurance company Alleghany for $11.6 billion, 1.26 times the insurer’s book value at the end of last year.
The acquisition builds out on Berkshire Hathaway’s insurance presence notable for subsidiaries such as General Re, Berkshire Hathaway Direct Insurance Company and the United States Liability Insurance Group.
The acquisition is the largest by Berkshire Hathaway since Buffet snapped up Precision Castparts for $37 billion in 2016.
“Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years,” said Buffet. “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.”
Berkshire Class A shares rose 2% on the news on Monday and Alleghany’s shares jumped 25%.