Berkshire Hathaway announced it will acquire Alleghany Corporation for $11.6 billion.

Berkshire will acquire all outstanding Alleghany shares for $848.02 per share in cash in a transaction that was unanimously approved by both boards of directors. Berkshire said the acquisition price represents a multiple of 1.26 times Alleghany’s book value at Dec. 31, 2021, a 29 percent premium to Alleghany’s average stock price over the last 30 days and a 16 percent premium to Alleghany’s 52-week high closing price.

The deal brings Alleghany’s president and chief executive officer Joseph Brandon back into the Berkshire family. From 2001-2008, Brandon was chair and CEO of Berkshire Hathaway’s General Re Corp. He joined Alleghany as executive vice president in 2012 and succeeded Weston Hicks as president of Alleghany in April last year.

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

In addition to General Re, Berkshire’s reinsurance and specialty businesses include National Indemnity, Berkshire Hathaway Specialty and USLI, among others. Alleghany’s reinsurance and specialty operations include TransRe, RSUI and CapSpecialty. Berkshire’s insurance operations also include personal lines giant GEICO.

Like Berkshire, in addition to operations in insurance and reinsurance, Alleghany has an extensive portfolio of investments in non-insurance companies. Warren Buffett, Berkshire Hathaway’s chair and CEO, made note of the similarities between the two conglomerates in a media statement. “Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years,” he said.

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.

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.

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.