Berkshire Hathaway to acquire Alleghany for $848.02 per share
Berkshire Hathaway (BRK.A) and Alleghany (Y) jointly announced they have entered into a definitive agreement under which Berkshire Hathaway will acquire all outstanding Alleghany shares for $848.02 per share in cash.
Alleghany Corporation provides property and casualty reinsurance and insurance products in the United States and internationally.
The transaction, which was unanimously approved by both boards of directors, represents a total equity value of approximately $11.6B.
The acquisition price represents a multiple of 1.26 times Alleghany’s book value at December 31, 2021, a 29% premium to Alleghany’s average stock price over the last 30 days and a 16% premium to Alleghany’s 52-week high closing price.
The transaction 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.
Alleghany will continue to operate as an independent subsidiary of Berkshire Hathaway after closing.
Chairman Jefferson Kirby, who controls 2.5% of Alleghany common shares, intends to vote his shares for 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 assurances 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 makes a determination requiring further disclosure.
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