Willkie Farr & Gallagher and Munger Tolles & Olson are advising on the $11.6bn acquisition of insurance-minded investment firm Alleghany Corp by Berkshire Hathaway, the investment company owned by billionaire Warren Buffett. 

Berkshire is set to buy all of Alleghany’s shares for $848.02 per share, a premium of 29% to Alleghany’s average stock price over the last 30 days. The all-cash transaction, which includes a 25-day ‘go-shop’ period, marks Berkshire’s largest acquisition since it purchased industrial goods maker Precision Castparts for $37bn in 2015.  

A team from Willkie’s New York office advised longtime client Alleghany on the latest deal, which is expected to close in the fourth quarter of 2022, while a team from Munger advised Omaha, Nebraska-based Berkshire. 

Willkie's roster is headlined by Steven Seidman, co-chair of the firm’s corporate and financial services department and its M&A practice group, Laura Delanoy, co-chair of the firm’s ESG practice, and corporate partner Laura Acker. 

Munger's team, meanwhile, includes corporate partners Robert Denham, Jennifer Broder and Tyler Hilton in Los Angeles and Brett Rodda in Washington DC. Tax partner David Goldman also worked on the deal in LA. 

Alleghany, founded in 1929 by a pair of railroad entrepreneurs, began pivoting towards the insurance market in the early 2000s. The New York-based company's current insurance portfolio includes RSUI Group, TransRe and CapSpecialty.

Jefferson Kirby, chair of Alleghany’s board of directors, said: “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. Berkshire Hathaway’s support, resources and expertise will provide added benefits and opportunities for Alleghany and its operating businesses for many years to come.”

Alleghany will operate as an independent subsidiary of Berkshire upon completion of the deal. Kirby, who controls 2.5% of Allegheny common shares, intends to vote his shares for the transaction, the company said in a statement. Members of the Kirby family have been at the helm of Alleghany since the Great Depression, when control of the company fell into the hands of former chairman Allan Kirby. 

Berkshire shares Alleghany’s focus on insurance companies, with its own portfolio including insurance giants like General Re and Geico, the second-largest auto insurer in the US behind State Farm. 

Buffett identified the similarities between the two companies in a statement on Monday, adding that Berkshire was the “perfect permanent home” for Alleghany and its subsidiaries. 

Willkie, which has advised Alleghany in several other big-ticket transactions including its 2017 acquisition of steel maker W&W|AFCO Steel, placed 10th in Refinitiv’s 2021 global M&A legal adviser ranking by deal volume.