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Berkshire Hathaway is paying $12 billion for insurance-to-toys conglomerate Alleghany

Warren Buffett has dived in Berkshire Hathaway’s $150 Billion Cash Stack with a $12 billion deal for Alleghany, a conglomerate that makes insurance for toys.

Omaha-based Berkshire, itself made up of a number of large insurers with other companies from Duracell to Kraft Heinz, said Monday it would pay $848 a share for Alleghany.

Founded as a railroad company nearly 100 years ago, Alleghany once owned nearly a fifth of US miles of track. Today it owns a number of insurance and reinsurance companies, as well as a toy manufacturer, a funeral products manufacturer, a hotel developer and a custom trailer manufacturer. It made $1 billion in profit last year.

Buffett said that “Berkshire will be the perfect permanent home for Alleghany, a company I’ve watched closely for 60 years,” adding that the group “shares a lot of similarities with Berkshire Hathaway.”

The price represents a 29 percent premium to Alleghany’s stock price over the past 30 days and a multiple of 1.26 times the company’s book value.

Alleghany Chairman Jefferson Kirby said the deal is “a rare opportunity to team up with a like-minded and highly respected investor and business leader.”

https://www.ft.com/content/f816080e-9e46-4e6b-b838-46845b64aa6c Berkshire Hathaway is paying $12 billion for insurance-to-toys conglomerate Alleghany

Adam Bradshaw

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