March 23, 2022 | Insurance | North America | Ended

Alleghany / Berkshire Hathaway: Deal Insights

Warren Buffett’s Berkshire Hathaway has dipped into its $147bn cash reserves to buy insurance conglomerate Alleghany for $11.6bn. Under the terms of the all-cash deal, announced on 21-Mar-22, Berkshire will pay $848.02 per share, representing a 25.3% premium over the target’s unaffected price on 18-Mar-22. This represents 1.2x Alleghany’s trailing book value as of 31-Dec-21. Berkshire had originally offered $850 per share, but Buffett told Alleghany that he did not want to pay for the target’s financial advisory fees so fees for financial advice would have to come out of the proceeds for Alleghany shareholders – hence the offer of $848.02, after deducting Goldman Sachs’ $27m advisory fee. The transaction has been approved by...

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