The Clap
Warren Buffet’s Berkshire Hathaway (NYSE: BRK) announced an $11.6 billion deal to acquire insurance company Alleghany Corp. (NYSE: Y).
The deets
Berkshire is buying Alleghany at a 29% premium to the latter’s average stock price over the last 30 days. The deal is Berkshire’s first since 2016 when it acquired Precision Castparts (NYSE: PCP).
Why this matters
Berkshire has a big pile of cash sitting around, & we mean big. Almost $150 billion big. Insurance is one of Berkshire’s big four businesses, & it played a key role in growing Berkshire to the $770 billion conglomerate it is now. Striking a deal at a time of geopolitical uncertainty & high market volatility shows that Buffet still sees potential for M&A activity.
