Warren Buffett's Berkshire Hathaway to buy Alleghany for $11.6 bn in return to dealmaking

 Berkshire Hathaway will acquire all outstanding Alleghany shares for $848.02 per share in cash

The transaction represents 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 

Alleghany adds to Berkshire's already large insurance portfolio, which includes Geico auto insurance, General Re reinsurance and a unit that insures against major and unusual risks 

Buffett is diving deeper into the world of insurance with the Alleghany deal, an industry that has been key to the growth of Berkshire into a conglomerate with a market value of more than $750 billion 

Berkshire CEO Buffett said in the statement. “I am particularly delighted that I will once again work together with my long-time friend, Joe Brandon." 

Warren Buffett's Berkshire Hathaway to buy Alleghany for $11.6 bn in return to dealmaking

Buffett had pledged in February to keep more than $30 billion of cash on hand, leaving plenty available for the right acquisition. 

The transaction is Berkshire’s largest since its 2016 acquisition of Precision Castparts Corp., That deal was valued at $37.2 billion, including debt. 

Alleghany, led by Brandon, will continue to operate as an independent unit when it joins Berkshire. The two companies share a history of railroads and insurance.  

Alleghany was formed as a holding company for some railroad holdings in 1929 but eventually diversified into insurance, according to its website. 

Berkshire, which counts insurers from Geico to Gen Re as part of its business, also currently owns railroad BNSF.