Warren Buffett just announced his biggest deal since 2016.
Berkshire Hathaway said Monday morning it agreed to buy insurance company Alleghany for $11.6 billion, or $848.02 per share, in cash. The Omaha, Nebraska-based conglomerate said the deal "represents a multiple of 1.26 times Alleghany's book value at December 31, 2021," as well as a 16% premium to Alleghany's average stock price in the past 30 days. The deal is expected to close in the fourth quarter of this year.
This transaction would mark Berkshire's biggest acquisition in six years when the conglomerate bought industrial company Precision Castparts for $37 billion, including debt.
Through its subsidiaries, New York-based Alleghany is involved in a number of different insurance businesses, including wholesale specialty, property and casualty, and reinsurance.
"Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years," Buffett, Berkshire's chairman and CEO, said in a statement.
Insurance is one of Berkshire's bread-and-butter businesses as it already owns Geico auto insurance, General Re reinsurance and others that have been driving growth in recent years.