Berkshire Hathaway to acquire Alleghany in $11.6B all-cash transaction

Mar. 21, 2022 5:47 AM ETAlleghany Corporation (Y), BRK.A, BRK.BBy: Khyathi Dalal, SA News Editor87 Comments

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  • Berkshire Hathaway (NYSE:BRK.A) and Alleghany (NYSE:Y) have entered into a definitive agreement wherein the former will acquire all outstanding Alleghany shares for $848.02/share in cash.
  • The transaction, scheduled to close in 4Q22, represents a total equity value of ~$11.6B and a multiple of 1.26 times Alleghany’s book value as of Dec.31, 2021 and a 29% premium to Alleghany’s average stock price over the last 30 days.
  • Post closure, Alleghany will continue to operate as an independent subsidiary of Berkshire Hathaway.
  • Under agreement terms, Alleghany may actively solicit and consider alternative acquisition proposals during a 25-day go-shop period.
  • Last week, Berkshire expanded its Occidental stake to 14.6%.
  • In early March, SA Contributor Growth at a Good Price stated that Berkshire Hathaway is a safe bet for an uncertain market.
  • While in the past 6-months the stock has garnered 25% returns for shareholders, it is currently trading close to its 52-week high levels; SA Authors have equal Strong Buy and Buy rating for the stock.
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