Warren Buffett is so admirable because nothing can shake him, least of all his investment style. Even if other methods may be more successful in the meantime, he knows exactly what he has in his investments and what returns they will bring him in the long run.
In recent years, Warren Buffett has been raising through his holding company Berkshire Hathaway (NASDAQ:GOOGL), which owns more than 99% of its wealth, accumulates more and more cash. More recently, it was around 150 billion US dollars. But the recent fall in prices and the panic that has been unleashed in some cases have once again been the perfect buying opportunity for the investor.
Warren Buffett is buying another insurance policy
Yes, Warren Buffett really did and insurance company with Berkshire Hathaway for about $11.6 billion. aleghany (WKN: 872718). You stay true to your selection criteria and acquire a company in your area of expertise. Alleghany is working fine and was priced very cheap prior to purchase. The shares were trading below book value and at a price-earnings ratio of less than 10.
It is also typical of Warren Buffett that he has known the company and its owners well for decades. “Berkshire will be the perfect permanent home for Alleghany, a company I have watched closely for 60 years. Over 85 years, the Kirby family has built a company that shares many similarities with Berkshire Hathaway. I am especially excited to return to work.” with my old friend Joe Brandon,” Warren Buffett said in a statement.
Berkshire Hathaway will pay $848.02 per Alleghany share, a premium of more than 25% (March 21, 2022) over the previous day’s price (March 18, 2022). However, the acquisition is a bargain for Warren Buffett and hardly comparable to the sums that many other large corporations spend on an acquisition.
Alleghany also benefits
Alleghany is happy that Warren Buffett doesn’t usually get involved in management. He knows the insurance is already well managed, so he’s holding back. At the same time, Alleghany can now take advantage of Berkshire Hathaway’s big insurance business.
“Berkshire Hathaway’s support, resources and experience will provide Alleghany and its businesses with additional benefits and opportunities for years to come. This is a great transaction for Alleghany’s owners, company, customers and employees,” said President and CEO Joseph P. Brandon.
Closing of the transaction is expected in the fourth quarter of 2022. Alleghany’s board of directors and shareholders have already approved the acquisition, so all subsequent steps are just a matter of form.
Warren Buffett’s article did it again first appeared in The Motley Fool Germany.
Christof Welzel owns shares of Berkshire Hathaway. The Motley Fool owns and recommends Berkshire Hathaway (B-share) shares and recommends the following options: short January 2023 $200 put on Berkshire Hathaway (B-share), short January 2023 $265 buy on Berkshire Hathaway (B-share ) and long January 2023 $200 call on Berkshire Hathaway (B shares).
Motley Fool Germany 2022