- All-cash transaction provides significant premium, delivering
substantial and certain value for Alleghany stockholders
- Strong strategic fit between Berkshire Hathaway and
Alleghany
- Alleghany and its subsidiaries will continue to operate as an
independent entity with increased capital strength and support from
Berkshire Hathaway
Berkshire Hathaway (NYSE:BRK.A; BRK.B) and Alleghany Corporation
(NYSE:Y) today 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. The
transaction, which was unanimously approved by both Boards of
Directors, represents a total equity value of approximately $11.6
billion. 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.
“Berkshire will be the perfect permanent home for Alleghany, a
company that I have closely observed for 60 years. Throughout 85
years the Kirby family has created a business that has many
similarities to Berkshire Hathaway. I am particularly delighted
that I will once again work together with my long-time friend, Joe
Brandon,” said Warren E. Buffett, Berkshire Hathaway’s Chairman and
Chief Executive Officer.
“My family and I have been significant shareholders of Alleghany
for over 85 years and are proud that our ownership will culminate
through this compelling transaction with Berkshire Hathaway. Not
only does this deal provide substantial and certain value to
stockholders, but it provides a rare opportunity to join forces
with a like-minded and highly respected investor and business
leader,” said Jefferson W. Kirby, Chair of the Alleghany Board of
Directors. “Berkshire Hathaway’s support, resources, and expertise
will provide added benefits and opportunities for Alleghany and its
operating businesses for many years to come.”
“This is a terrific transaction for Alleghany’s owners,
businesses, customers, and employees,” said Joseph P. Brandon,
Alleghany’s President and Chief Executive Officer. “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 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. Mr. 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.
Goldman Sachs & Co. LLC is serving as financial advisor and
Willkie Farr & Gallagher LLP is serving as legal advisor to
Alleghany. Munger, Tolles & Olson LLP is serving as legal
advisor to Berkshire Hathaway.
About Berkshire Hathaway
Berkshire Hathaway and its subsidiaries engage in diverse
business activities including insurance and reinsurance, utilities
and energy, freight rail transportation, manufacturing, retailing
and services. Common stock of the company is listed on the New York
Stock Exchange, trading symbols BRK.A and BRK.B.
About Alleghany
Alleghany Corporation owns operating subsidiaries and manages
investments, anchored by a core position in property and casualty
reinsurance and insurance. Alleghany's property and casualty
subsidiaries include: Transatlantic Holdings, Inc., a leading
global reinsurer; RSUI Group, Inc., which underwrites wholesale
specialty insurance coverages; and CapSpecialty, Inc., an
underwriter of specialty casualty and surety insurance coverages.
Alleghany's subsidiary Alleghany Capital Corporation owns and
supports a diverse portfolio of eight non-financial businesses.
Forward-looking Statements
This release contains disclosures, which may be deemed
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995.
Various forward-looking statements in this release relate to the
acquisition by Berkshire Hathaway of Alleghany Corporation.
Important transaction-related and other risk factors that may cause
these forward-looking statements to differ include: (i) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the merger agreement; (ii) the
completion of the transaction on anticipated terms and timing,
including obtaining required stockholder and regulatory approvals,
and the satisfaction of other conditions to the completion of the
transaction; (iii) significant transaction costs associated with
the transaction; (iv) potential litigation relating to the
transaction, including the effects of any outcomes related thereto;
(v) the risk that disruptions from the transaction will harm
Alleghany’s business, including current plans and operations; (vi)
the ability of Alleghany to retain and hire key personnel; and
(vii) potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the
transaction.
Additional risks and uncertainties are discussed in Alleghany’s
Annual Report on Form 10-K for the year-ended December 31, 2021
filed with the Securities and Exchange Commission (the “SEC”) and
subsequent filings with the SEC. All forward-looking statements
speak only as of the date they are made and are based on
information available at that time. Alleghany does not undertake
any obligation to update or revise any forward-looking statements
to reflect subsequent circumstances or events.
Important Additional Information and Where to Find It
This release is being issued in connection with the proposed
acquisition of Alleghany by Berkshire Hathaway. In connection with
the transaction, Alleghany intends to file the proxy statement and
certain other documents regarding the transaction with the SEC. The
definitive version of the proxy statement (if and when available)
will be mailed to Alleghany’s stockholders. This communication does
not constitute an offer to sell or the solicitation of an offer to
buy any securities, and is not a substitute for the proxy statement
or any other document that Alleghany may file with the SEC.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY
OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE
SEC, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
TRANSACTION AND RELATED MATTERS.
Investors and security holders may obtain, free of charge,
copies of the proxy statement (when it is available) and other
documents that are filed or will be filed with the SEC by Alleghany
through the website maintained by the SEC at www.sec.gov, the
Investor Relations portion of Alleghany’s website at
https://www.alleghany.com/investor-relations/ or by contacting Dale
James at 212-752-1356.
Participants in the Solicitation
Alleghany and certain of its directors, executive officers and
other employees may be deemed to be participants in the
solicitation of proxies from Alleghany’s stockholders in connection
with the transaction. Additional information regarding the identity
of the participants, and their respective direct and indirect
interests in the transaction, by security holdings or otherwise,
will be set forth in the proxy statement and other materials to be
filed with the SEC in connection with the transaction (if and when
they become available). Information relating to the foregoing can
also be found in Alleghany’s proxy statement for its 2021 annual
meeting of stockholders, which was filed with the SEC on March 15,
2021. You may obtain free copies of these documents using the
sources indicated above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220321005325/en/
Berkshire Hathaway
Marc D. Hamburg 402-346-1400
Alleghany
Investors Dale James Alleghany Corporation 212-752-1356
Dan Burch Mackenzie Partners, Inc.
dburch@mackenziepartners.com
Media Paul Scarpetta/Drew Brown/Warren Rizzi Sard Verbinnen
& Co. AlleghanyCorp-SVC@sardverb.com
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