By Nathalie Voit

Berkshire Hathaway said it plans to acquire insurance giant Alleghany Corporation for $11.6 billion, or $848.02 per share, according to a news release published by the multinational conglomerate on March 21.

Berkshire Chairman and CEO Warren Buffett said the all-cash deal 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 would mark Berkshire’s largest acquisition since 2016, when the conglomerate purchased metal parts manufacturer Precision Castparts for $37.2 billion, including debt. The deal is one of the five largest in the company’s history, according to Yahoo Finance.

“Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years,” Buffett said in the statement. “Throughout 85 years, the Kirby family has created a business that has many similarities to Berkshire Hathaway.”

The billionaire investor added he was “particularly delighted” to work alongside his long-time friend, Joe Brandon. Brandon is Alleghany’s president and CEO.

“This is a terrific transaction for Alleghany’s owners, businesses, customers, and employees,” Brandon said. “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.”

The agreement is expected to finalize in the fourth quarter of 2022. Alleghany will continue to operate as an independent subsidiary after the deal closes, according to the release.

As of Monday afternoon, Warren Buffett’s stock reached a new 52-week high to trade at $523,745 a share. The company is famously known as the world’s most expensive stock – by far.

New York-based Alleghany was also up by nearly 25% to trade at $844.62 a share.