Buffett’s conglomerate closes $11.6B Alleghany insurance buy

Oct 19, 2022, 10:56 AM | Updated: 11:14 am
FILE - Warren Buffett, Chairman and CEO of Berkshire Hathaway, speaks during a game of bridge follo...

FILE - Warren Buffett, Chairman and CEO of Berkshire Hathaway, speaks during a game of bridge following the annual Berkshire Hathaway shareholders meeting on May 5, 2019, in Omaha, Neb. Buffett's company completed its largest acquisition in years Wednesday, Oct. 19, 2022, with its $11.6 billion purchase of the Alleghany insurance conglomerate. (AP Photo/Nati Harnik, File)

(AP Photo/Nati Harnik, File)

OMAHA, Neb. (AP) — Warren Buffett’s company completed its largest acquisition in years Wednesday with its $11.6 billion purchase of the Alleghany insurance conglomerate.

The purchase announced in March will further expand Berkshire’s sizeable insurance operations and add a few more companies to its stable, including a steel fabricator and toy company owned by Alleghany.

In many ways, Alleghany is similar to Berkshire. Buffett’s Omaha, Nebraska-based conglomerate owns Geico, General Re and a number of other insurance companies, but it also owns BNSF railroad, several major utilities and an eclectic assortment of dozens of manufacturing and retail companies, including Precision Castparts, Dairy Queen, See’s Candy and NetJets.

Alleghany shareholders received $848.02 cash per share as part of the deal.

Much like it has done with other acquisitions, Berkshire will allow New York-based Alleghany to largely continue to run itself.

Edward Jones analyst Jim Shanahan said Alleghany’s CEO Joe Brandon, who previously ran a different Berkshire insurance company, could one day be a candidate to replace Vice Chairman Ajit Jain and oversee all of Berkshire’s insurance companies.

Berkshire’s last major acquisition came in 2016 when it paid $32.36 billion to buy aviation parts maker Precision Castparts. Buffett has always been reluctant to overpay for acquisitions, and he has said Berkshire faces more competition for deals these days from private-equity firms.

But Buffett has put more than $51 billion to work in the stock market this year, including buying up roughly $12 billion worth of Occidental Petroleum stock and another $20 billion worth of Chevron shares to bet big on oil production.

Still, Berkshire was sitting on $105.4 billion cash at the end of the second quarter.

It will use some of that at the start of next year to more than double its stake in the Pilot chain of more than 800 truck stops across 44 states and six Canadian provinces. The terms of Buffett’s 2017 agreement call for it to boost its stake from its current 38.6% ownership to 80% in 2023. That will leave the Haslam family that runs the business based in Knoxville, Tennessee, with a 20% stake.

Shanahan estimated that the Pilot deal will use at least $3.5 billion, but Berkshire has never disclosed the terms of that deal.

In addition to owning more than 90 operating companies, Berkshire holds a sizeable investment portfolio with major stakes in Apple, Bank of America, American Express and Coca-Cola among other companies.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Associated Press

Iran’s national soccer team receives subdued welcome home

BAGHDAD (AP) — Iran’s national soccer team received a subdued welcome home after its World Cup defeat against the United States, a match played against the backdrop of ongoing anti-government protests in Iran. The players returned to Iran late Wednesday, a day their 1-0 loss. Anti-government protesters, considering the team a symbol of the regime, […]
4 hours ago
A child wearing a face mask and riding on a scooter passes by a worker in protective suit on his wa...
Associated Press

China eases some virus controls, searches pedestrians

BEIJING (AP) — More Chinese cities eased some anti-virus restrictions as police patrolled their streets to head off protests Thursday while the ruling Communist Party prepared for the high-profile funeral of late leader Jiang Zemin. Guangzhou in the south, Shijiazhuang in the north, Chengdu in the southwest and other major cities announced they were easing […]
4 hours ago
Professor Sean Turnell and his wife Dr. Ha Vu attend Question Time in the House of Representatives ...
Associated Press

Australian jailed in Myanmar applauded in Parliament

CANBERRA, Australia (AP) — Sean Turnell, an Australian economist who spent almost two years imprisoned in Myanmar, received a hero’s welcome Thursday at Australia’s Parliament House where lawmakers rose in a standing ovation and the prime minister praised his courage, optimism and resilience. Turnell, an adviser to Myanmar’s elected leader Aung San Suu Kyi, was […]
4 hours ago
FILE - European Council President Charles Michel arrives to meet with European Union foreign policy...
Associated Press

China’s Xi urges Ukraine talks in meeting with EU’s Michel

BEIJING (AP) — Chinese leader Xi Jinping urged negotiations on a political solution to the Ukraine conflict in talks with visiting European Council President Charles Michel in Beijing Thursday, state broadcaster CCTV said. Xi was quoted as saying that “solving the Ukrainian crisis through political means is in the best interest of Europe and the […]
4 hours ago
Witalij Miskow, 45, speaks about his mental trauma at a clinic which treats veterans for PTSD, post...
Associated Press

‘Do something:’ Ukraine works to heal soldiers’ mental scars

KYIV, Ukraine (AP) — Sleep plunges the soldier back into the horrors of Ukraine’s battlefields. He can hear bombs falling again and picture explosions. He imagines himself frantically running, trying to save himself and others. The nightmares are so vivid and frightening that he pleads with his doctor for help. “It will blow my mind,” […]
4 hours ago
A woman uses her phone in front of monitors showing Japan's Nikkei 225 index at a securities firm w...
Associated Press

Asian shares gain after Fed chair signals slower rate hikes

BANGKOK (AP) — Shares advanced in Europe and Asia on Thursday after a rally on Wall Street spurred by the Federal Reserve chair’s comments on easing the pace of interest rate hikes to tame inflation. Signs that China may be shifting its approach to containing COVID-19 outbreaks to focus more on vaccinations, while some cities […]
1 day ago

Sponsored Articles

Quantum Fiber

How high-speed fiber internet edges out cable for everyday use

In a world where technology drives so much of our daily lives, a lack of high-speed internet can be a major issue.
Day & Night Air Conditioning, Heating and Plumbing

Here are 4 signs the HVAC unit needs to be replaced

Pool renovations and kitchen upgrades may seem enticing, but at the forefront of these investments arguably should be what residents use the most. In a state where summertime is sweltering, access to a functioning HVAC unit can be critical.
Day & Night Air Conditioning, Heating and Plumbing

Ways to prevent clogged drains and what to do if you’re too late

While there are a variety of ways to prevent clogged drains, it's equally as important to know what to do when you're already too late.
Buffett’s conglomerate closes $11.6B Alleghany insurance buy