TransRe owner Alleghany to be acquired by Berkshire Hathaway

Alleghany Corporation, which owns a number of re/insurers including TransRe, which has a presence in Bermuda, is to be acquired by Warren Buffett’s Berkshire Hathaway in a $11.6bn all-cash deal.

The two companies jointly announced that they have entered into a definitive agreement under which Berkshire Hathaway will acquire all outstanding Alleghany shares for $848.02 per share in cash. Upon closing, Alleghany will continue to operate as an independent subsidiary of Berkshire Hathaway.

As well as TransRe, Alleghany Corporation owns wholesale specialty insurer RSUI, and CapSpecialty, an underwriter of specialty casualty and surety insurance.

The transaction is unanimously approved by both boards of directors, and is expected to close in the fourth quarter of 2022, subject to customary closing conditions, including approval by Alleghany stockholders and receipt of regulatory approvals.

Buffett highlighted strong strategic fit between Berkshire Hathaway and Alleghany, stating that “Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years.”

“Throughout 85 years the Kirby family has created a business that has many similarities to Berkshire Hathaway. I am particularly delighted that I will once again work together with my long-time friend, Joe Brandon,” said Buffett, chairman and chief executive officer of Berkshire Hathaway.

Joseph Brandon, Alleghany’s president and chief executive officer, described the $11.6bn transaction as “terrific” for its owners, businesses, customers, and employees.

“The value of this transaction reflects the quality of our franchises and is the product of the hard work, persistence, and determination of the Alleghany team over decades. As part of Berkshire Hathaway, which epitomizes our long-term management philosophy, each of Alleghany’s businesses will be exceptionally well positioned to serve its clients and achieve its full potential,” Brandon said.

Kirby noted: “Berkshire Hathaway’s support, resources, and expertise will provide added benefits and opportunities for Alleghany and its operating businesses for many years to come.”

“My family and I have been significant shareholders of Alleghany for over 85 years and are proud that our ownership will culminate through this compelling transaction with Berkshire Hathaway. Not only does this deal provide substantial and certain value to stockholders, but it provides a rare opportunity to join forces with a like-minded and highly respected investor and business leader,” he said.