Warren Buffett’s Berkshire Hathaway Inc is in advanced discussions to sell its Applied Underwriters workers compensation unit to a consortium of insurance firms, people familiar with the matter said on Friday.

The deal would be a rare divestment by Buffett, who has built a corporate empire of more than 90 businesses in sectors spanning insurance, chemicals, energy, railroads, food and retail. Unlike private equity firms, the 88-year-old billionaire investor does not seek to cash out once he takes over a company.

However, San Francisco-based Applied Underwriters now sits outside Berkshire Hathaway’s insurance focus, making it a non-core asset Buffett wishes to shed, the sources said.

Berkshire Hathaway’s insurance businesses include the auto insurer Geico, reinsurer General Re, and a unit that protects against major catastrophes or unusual risks.

Applied Underwriters, on the other hand, provides bundled workers compensation and other employment-related insuranceproducts targeted to small and medium-sized businesses.

A grouping of insurance firms and a hedge fund-backed reinsurance firm are in talks to buy Applied Underwriters at around the value of its book of business, the sources said, declining to disclose the price and the identity of the buyers.

The sources cautioned there is always a possibility that deal negotiations end unsuccessfully and asked not to be identified because the matter is confidential.

Berkshire Hathway did not immediately respond to a request for comment.

Applied Underwriters has also been in the crosshairs of California’s insurance regulator, reaching a settlement agreement in June 2017 over “bait and switch marketing tactics,” according to a statement from the state’s insurance commissioner at the time. Berkshire Hathway acquired Applied Underwriters in May 2006.

Buffett is scheduled to publish his annual letter to Berkshire Hathaway shareholders this weekend, alongside the company’s annual report. Berkshire Hathaway’s cash pile reached $103.6 billion as of the end of September, as Buffett has struggled to find attractive acquisition opportunities to put money to work.

Buffett’s efforts to divest Applied Underwriters come as one of his biggest investments, Kraft Heinz Co, has soured. On Thursday, the food giant announced a multibillion-dollar writedown on its marquee brands, raising concerns that years of rigorous cost cuts had eroded the value of its Kraft and Oscar Mayer products. ( Additional reporting by Jonathan Stempel in New York.)

Topics Workers' Compensation Underwriting