Berkshire Hathaway plans to acquire insurance company Alleghany. If the deal succeeds, it will be the largest acquisition of Warren Buffett’s investment vehicle since 2016.
In recent years, Warren Buffett has complained about the lack of attractive investment opportunities and his car has accumulated huge amounts of cash. At the end of last year, Berkshire had nearly $150 billion. liquid money.
Now the Oracle of Omaha has finally found a worthy target. It intends to spend $11.6 billion on acquiring Al Afghani. – More than 25 percent more than the company’s value by the market at the close of trading on Friday. The deal will be completed by the end of the year. Afghani now has less than a month to find a better deal.
To find a bigger investment, Buffett’s car has to go back to 2016, when Berkshire acquired Precision Castparts for $37 billion. Recently, an investor invested several billion to buy a stake in Occidental Petroleum, a company from the oil sector.
Berkshire’s portfolio already includes other insurance companies – Geico and General Re. Rich sometimes called herself “Little Berkshire”, and lumped in the purse, in addition to the insurance business, is also a steel and toy producer and a funeral service company.
“Berkshire would be the perfect, sustainable home for Alleghany, a company that I have followed for 60 years,” said Warren Buffett. “For 85 years, the Kirby family has created a twin company similar to Berkshire Hathaway,” he added.
This year, Berkshire is impressed with higher bids on the back of a weaker US market than in recent years. The company’s capitalization increased by more than 15% to reach $800 billion. Buffett’s car is currently the seventh highest publicly traded company in the world by market valuation.
After announcing the intent to takeover, Berkshire stock jumped more than 2 percent, Alleghans rose nearly 25 percent, and closed Monday’s session at less than $845 per share, while Buffett plans to pay $848 per share.
At the end of last year, Berkshire Hathaway Its investment portfolio had 41 listed companies with a total market capitalization close to $330 billion. Apple shares accounted for nearly half. The conglomerate also includes insurance company Geico, battery manufacturer Duracell, clothing company Fruit of the Loom, railroad company BNSF and restaurant chain Dairy Queen.
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