US-based Berkshire Hathaway has agreed to acquire insurance company Alleghany in an all-cash transaction valued at around $11.6bn.
Under the deal, Berkshire Hathaway will purchase all outstanding shares of Alleghany by paying $848.02 per share in cash.
Through its operating subsidiaries, Alleghany offers property and casualty reinsurance and insurance services to its customers.
Transatlantic Holdings, RSUI Grou, and CapSpecialty are the property and casualty subsidiaries of Alleghany.
Transatlantic is a global reinsurer, while RSUI underwrites wholesale specialty insurance coverages, and CapSpecialty underwrites specialty casualty and surety insurance coverages.
Alleghany Capital, a subsidiary of Alleghany, is said to own and support a diversified portfolio of eight non-financial businesses.
Alleghany president and CEO Joseph Brandon said: “The value of this transaction reflects the quality of our franchises and is the product of the hard work, persistence, and determination of the Alleghany team over decades.”
Upon completion of the deal, Alleghany will continue to run as an independent subsidiary of Berkshire Hathaway.
Berkshire Hathaway chairman and CEO Warren Buffett said: “Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years.
“Throughout 85 years the Kirby family has created a business that has many similarities to Berkshire Hathaway.”
Subject to customary closing conditions including approval by Alleghany stockholders and receipt of regulatory approvals, the deal is anticipated to be completed in the fourth quarter of this year.
Goldman Sachs is acting as a financial advisor to Alleghany, while Willkie Farr & Gallagher is acting as a legal advisor. Munger, Tolles & Olson is acting as legal advisor to Berkshire Hathaway.