Buffett’s conglomerate closes $11.6B Alleghany insurance buy

Oct 19, 2022, 10:56 AM | Updated: 11:14 am

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.


FILE - People visit Magic Kingdom Park at Walt Disney World Resort in Lake Buena Vista, Florida, on...
Associated Press

Disney World unions vote down offer covering 45,000 workers

ORLANDO, Fla. (AP) — Union members voted down a contract proposal covering tens of thousands of Walt Disney World service workers, saying it didn’t go far enough toward helping employees face cost-of-living hikes in housing and other expenses in central Florida. The unions said that 13,650 out of 14,263 members who voted on the contract […]
9 hours ago
Jessica Day-Weaver holds a ceramic hand print of her daughter, Anastasia, at her home, Thursday, Fe...
Associated Press

‘Died suddenly’ posts twist tragedies to push vaccine lies

Results from 6-year-old Anastasia Weaver’s autopsy may take weeks. But online anti-vaccine activists needed only hours after her funeral this week to baselessly blame the COVID-19 vaccine. A prolific Twitter account posted Anastasia’s name and smiling dance portrait in a tweet with a syringe emoji. A Facebook user messaged her mother, Jessica Day-Weaver, to call […]
9 hours ago
FILE - This Dec. 21, 2022, image provided by Eisai in January 2023 shows vials and packaging for th...
Associated Press

Why a new Alzheimer’s drug is having a slow US debut

The first drug to show that it slows Alzheimer’s is on sale, but treatment for most patients is still several months away. Two big factors behind the slow debut, experts say, are scant insurance coverage and a long setup time needed by many health systems. Patients who surmount those challenges will step to the head […]
9 hours ago
FILE - President Joe Biden speaks on the January jobs report in the Eisenhower Executive Office Bui...
Associated Press

State of the Union: Biden sees economic glow, GOP sees gloom

WASHINGTON (AP) — Going into Tuesday’s State of the Union address, President Joe Biden sees a nation with its future aglow. Republicans take a far bleaker view — that the country is beset by crushing debt and that Biden is largely responsible for inflation. And the GOP now holds a House majority intent on blocking […]
9 hours ago
Sri Lankan government soldiers march carrying national flags during the 75th Independence Day cerem...
Associated Press

Sri Lanka marks independence anniversary amid economic woes

COLOMBO, Sri Lanka (AP) — Sri Lanka marked its 75th independence anniversary on Saturday as a bankrupt nation, with many citizens angry, anxious and in no mood to celebrate. President Ranil Wickremesinghe, who has started to improve some but not all of the acute shortages, acknowledged the somber state of the nation, saying in a […]
1 day ago
FILE - President Joe Biden delivers his first State of the Union address to a joint session of Cong...
Associated Press

Biden makes progress on ‘unity agenda’ outlined in 2022

WASHINGTON (AP) — A year ago, President Joe Biden used his first State of the Union address to push top Democratic priorities that were sure to face a battle in the narrowly divided Congress but he also laid out a four-pronged “unity agenda” that would be an easier sell. Biden’s unity goals would be hard […]
1 day ago

Sponsored Articles

Day & Night Air Conditioning, Heating and Plumbing

Company looking for oldest air conditioner and wants to reward homeowner with new one

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.
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.
(Desert Institute for Spine Care photo)...

Why DISC is world renowned for back and neck pain treatments

Fifty percent of Americans and 90% of people at least 50 years old have some level of degenerative disc disease.
Buffett’s conglomerate closes $11.6B Alleghany insurance buy