Berkshire Hathaway to acquire Alleghany Corporation for $848.02 per share in $11.6 billion deal

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  • The all-cash transaction offers a significant premium, delivering substantial and certain value to Alleghany shareholders
  • Strong strategic fit between Berkshire Hathaway and Alleghany
  • Alleghany and its subsidiaries will continue to operate as an independent entity with increased capital strength and support from Berkshire Hathaway

OMAHA, Neb. & NEW YORK–(BUSINESS WIRE)– Berkshire Hathaway (NYSE: BRK.A; BRK.B) and Alleghany Corporation (NYSE: Y) today jointly announced that they have entered into a definitive agreement under which Berkshire Hathaway will acquire all Alleghany shares outstanding for $848.02 per share in cash. The transaction, which was unanimously approved by both boards of directors, represents a total net worth of approximately $11.6 billion. The acquisition price represents a multiple of 1.26 times Alleghany’s book value as of December 31, 2021, a premium of 29% to the average price of Alleghany’s shares over the last 30 days and a premium of 16 % over Alleghany’s 52-week high closing price.

“Berkshire will be the perfect permanent home for Alleghany, a business I have watched closely for 60 years. Over 85 years, the Kirby family has built a business that bears many similarities to Berkshire Hathaway. I’m especially excited to be working with my longtime friend Joe Brandon again,” said Warren E. Buffett, Chairman and CEO of Berkshire Hathaway.

“My family and I have been significant shareholders of Alleghany for over 85 years and are proud that our shareholding resulted in this compelling transaction with Berkshire Hathaway. Not only does this deal provide substantial and certain shareholder value, it provides a rare opportunity to partner with a like-minded and highly respected investor and business leader,” said Jefferson W. Kirby, Chairman of the Board. Board of Directors of Alleghany. “Berkshire Hathaway’s support, resources and expertise will provide additional benefits and opportunities to Alleghany and its operations for many years to come. »

“This is an exciting transaction for Alleghany owners, businesses, customers and employees,” said Joseph P. Brandon, President and CEO of Alleghany. “The value of this transaction reflects the quality of our franchises and is the product of the hard work, perseverance and determination of the Alleghany team over decades. As part of Berkshire Hathaway, which embodies our long-term management philosophy, each of Alleghany’s businesses will be uniquely positioned to serve its customers and realize its full potential.

The transaction is expected to close in the fourth quarter of 2022, subject to customary closing conditions, including Alleghany shareholder approval and receipt of regulatory approvals. Alleghany will continue to operate as an independent subsidiary of Berkshire Hathaway after the closure. Mr. Kirby, who controls 2.5% of Alleghany common stock, intends to vote for his shares in connection with the transaction.

Under the terms of the definitive merger agreement, Alleghany may actively solicit and consider alternative acquisition proposals during a 25-day go-shop period. Alleghany has the right to terminate the merger agreement to accept a superior proposal during the go-shop period, subject to the terms and conditions of the merger agreement. There can be no assurance that the go-shop process will result in a superior proposal, and Alleghany does not intend to communicate developments regarding the process unless and until Alleghany’s Board of Directors make a decision requiring further disclosure.

Goldman Sachs & Co. LLC is financial advisor and Willkie Farr & Gallagher LLP is legal advisor to Alleghany. Munger, Tolles & Olson LLP is legal counsel to Berkshire Hathaway.

About Berkshire Hathaway

Berkshire Hathaway and its subsidiaries are engaged in a variety of business activities, including insurance and reinsurance, utilities and energy, rail freight, manufacturing, retail and services. The company’s common stock trades on the New York Stock Exchange under the trading symbols BRK.A and BRK.B.

About Alleghany

Alleghany Corporation has operating subsidiaries and manages investments, anchored by a central position in reinsurance and property and casualty insurance. Alleghany’s P&C subsidiaries include: Transatlantic Holdings, Inc., a leading global reinsurer; RSUI Group, Inc., which underwrites wholesale specialty insurance coverage; and CapSpecialty, Inc., an underwriter of specialty property and casualty insurance coverage. Alleghany’s subsidiary, Alleghany Capital Corporation, owns and supports a diversified portfolio of eight non-financial companies.

Forward-looking statements

This release contains information that may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Various forward-looking statements contained in this release relate to Berkshire Hathaway’s acquisition of Alleghany Corporation. Important transaction-related and other risk factors that could cause these forward-looking statements to differ include: (i) the occurrence of any event, change or other circumstance that could cause the merger agreement to terminate; (ii) the completion of the transaction on the terms and schedule anticipated, including obtaining required shareholder and regulatory approvals, and the satisfaction of other conditions to the completion of the transaction; (iii) significant transaction costs associated with the transaction; (iv) potential litigation related to the transaction, including the effects of any related results; (v) the risk that disruptions to the transaction will adversely affect Alleghany’s business, including current plans and operations; (vi) Alleghany’s ability to retain and hire key personnel; and (vii) any adverse reactions or changes in business relationships resulting from the announcement or completion of the transaction.

Additional risks and uncertainties are discussed in Alleghany’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”) and subsequent filings with the DRY. All forward-looking statements speak only as of the date they are made and are based on information available at that time. Alleghany undertakes no obligation to update or revise any forward-looking statements to reflect subsequent circumstances or events.

Important additional information and where to find it

This press release is issued in the context of the proposed acquisition of Alleghany by Berkshire Hathaway. In connection with the transaction, Alleghany intends to file the proxy statement and certain other documents relating to the transaction with the SEC. The final proxy statement (if any) will be mailed to Alleghany shareholders. This communication does not constitute an offer to sell or the solicitation of an offer to buy securities, and does not replace the proxy statement or any other document that Alleghany may file with the SEC.

INVESTORS AND SECURITYHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS) AND ANY OTHER RELEVANT DOCUMENTS WHICH ARE OR WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND RELATED MATTERS.

Investors and security holders may obtain free copies of the proxy statement (when available) and other documents filed or to be filed with the SEC by Alleghany through the website operated by the SEC. at the address www.sec.govthe Investor Relations section of Alleghany’s website at https://www.alleghany.com/investor-relations/ or by contacting Dale James at 212-752-1356.

Participants in the solicitation

Alleghany and certain of its directors, officers and other employees may be considered participants in the solicitation of proxies from Alleghany stockholders in connection with the transaction. Additional information regarding the identity of the participants and their respective direct and indirect interests in the transaction, by holding securities or otherwise, will be set forth in the proxy statement and other documents to be filed with the SEC in the part of the transaction (if and when they will be available). Information relating to the above can also be found in Alleghany’s proxy statement for its 2021 annual meeting of shareholders, which was filed with the SEC on March 15, 2021. You may obtain free copies of these documents using the sources listed above.

Berkshire Hathaway

Marc D. Hamburg

402-346-1400

Alleghenia

Investors

Dale James

Alleghany Society

212-752-1356

Dan Burch

Mackenzie Partners, Inc.

[email protected]

Media

Paul Scarpetta/Drew Brown/Warren Rizzi

Sard Verbinnen & Co.

[email protected]

Source: Berkshire Hathaway

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