NEW YORK, April 25 (Reuters) – Elon Musk clinched a deal to buy Twitter Inc (TWTR.N) for $44 billion cash on Monday in a transaction that will shift control of the social media platform populated by millions of users and global leaders to the world’s richest person.
It is a seminal moment for the 16-year-old company that emerged as one of the world’s most influential public squares and now faces a string of challenges.
Discussions over the deal, which last week appeared uncertain, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his offer.
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Under pressure, Twitter started negotiating with Musk to buy the company at the proposed $54.20 per share price. read more
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a statement.
Twitter’s shares were up about 6% following the news.
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Reporting by Greg Roumeliotis in New York, additional reporting by Krystal Hu;
Editing by Mark Potter and Matthew Lewis
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April 24 (Reuters) – The first all-private astronaut team ever to fly aboard the International Space Station (ISS) departed the orbiting outpost on Sunday to begin a descent back to Earth, capping a two-week science mission hailed as a milestone in commercial spaceflight.
A SpaceX Crew Dragon capsule carrying the four-man team from the Houston-based startup company Axiom Space undocked from the ISS at about 9:10 p.m. EDT (0110 GMT Monday) to embark on a 16-hour return flight, a live NASA webcast showed.
The Axiom astronauts, garbed in their helmeted white-and-black spacesuits, were seen strapped into the crew cabin shortly before the spacecraft separated from the station, orbiting some 250 miles (420 km) above Earth. A couple of brief rocket thrusts then pushed the capsule safely clear of the ISS.
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If all goes smoothly, the Dragon capsule, dubbed Endeavour, will parachute into the Atlantic off the coast of Florida on Monday around 1 p.m. EDT (1700 GMT).
The flight home was postponed for several days due to unfavorable weather at the splashdown zone, extending the Axiom crew’s stay in orbit well beyond its original departure date early last week.
The multinational team was led by Spanish-born retired NASA astronaut Michael Lopez-Alegria, 63, Axiom’s vice president for business development. Larry Connor, 72, a real estate-technology entrepreneur and aerobatics aviator from Ohio, was the second in command.
Rounding out the Ax-1 crew were investor-philanthropist and former Israeli fighter pilot Eytan Stibbe, 64, and Canadian businessman and philanthropist Mark Pathy, 52, both serving as mission specialists.
The International Space Station (ISS) is photographed by Expedition 66 crew member Roscosmos cosmonaut Pyotr Dubrov from the Soyuz MS-19 spacecraft, in this image released April 20, 2022. Pyotr Dubrov/Roscosmos/Handout via REUTERS
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Launched from NASA’s Kennedy Space Center on April 8, they spent two weeks aboard ISS with the seven regular, government-paid crew of the space station: three American astronauts, a German astronaut and three Russian cosmonauts.
The Axiom quartet became the first all-commercial astronaut team ever launched to the space station, taking with them equipment for two dozen science experiments, biomedical research and technology demonstrations to conduct in orbit. read more
Axiom, NASA and SpaceX have touted the mission as a turning point in the expansion of privately funded space-based commerce, constituting what industry insiders call the “low-Earth orbit economy,” or “LEO economy” for short.
Ax-1 marks the sixth human spaceflight SpaceX has launched in nearly two years, following four NASA astronaut missions to the ISS, plus the Inspiration 4 flight in September, which sent an all-civilian crew into Earth orbit for the first time, though not to the space station.
SpaceX, the private rocket company founded by Tesla Inc (TSLA.O) electric carmaker CEO Elon Musk, has been contracted to fly three more Axiom astronaut missions to the ISS over the next two years. The price tag for such outings remains high.
Axiom charges customers $50 million to $60 million per seat, according to Mo Islam, head of research for the investment firm Republic Capital, which holds stakes in both Axiom and SpaceX.
Axiom also was selected by NASA in 2020 to build a new commercial addition to the space station, which a U.S.-Russian-led consortium of 15 countries has operated for more than two decades. Plans call for the Axiom segment to eventually replace the ISS when the rest of the space station is retired around 2030.
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Reporting by Steve Gorman in Los Angeles; Editing by Sandra Maler and Bradley Perrett
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April 20 (Reuters) – Billionaire investor William Ackman liquidated a $1.1 billion bet on Netflix (NFLX.O) on Wednesday, locking in a loss of more than $400 million as the streaming service’s stock plunged following news that it lost subscribers for the first time in a decade.
Ackman’s hedge fund Pershing Square Capital Management made an abrupt U-turn, selling the 3.1 million shares it had bought just three months ago as Netflix’ shares tumbled 35% to $226.19.
In January, the investor funneled over $1 billion into the streaming service just days after a disappointing forecast for subscriptions pushed the share price lower. Now a second bout of negative news about subscribers – the company said it had lost 200,000 – prompted the fund manager to turn his back on a company he had showered with praise only weeks before.
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In a brief statement announcing the move, Ackman said proposed business model changes, including incorporating advertising and going after non-paying customers, made sense but would make the company too unpredictable in the short term.
“While Netflix’s business is fundamentally simple to understand, in light of recent events, we have lost confidence in our ability to predict the company’s future prospects with a sufficient degree of certainty,” he wrote.
Pershing Square, which now invests $21.5 billion, buys shares in only about a dozen companies at a time and needs a “high degree of predictability” in its portfolio companies, Ackman said.
Rather than wait around for things to improve at Netflix, Ackman locked in losses that are calculated to be more than $400 million, people familiar with the portfolio said. After the sale, Pershing Square’s portfolios are off roughly two percent for the year, Ackman said.
Netflix said it had lost 200,000 subscribers in its first quarter, falling well short of its modest predictions that it would add 2.5 million subscribers. Its decision in early March to suspend service in Russia after it invaded Ukraine resulted in the loss of 700,000 members. read more
Profitable hedges helped Pershing Square survive the early days of the pandemic in 2020 and then again in recent months as interest rates began to rise. The last three years have been among the best in the hedge fund’s lifetime, including a 70.2% gain in 2020.
But Ackman also acknowledged in his statement on Wednesday that he had learned from leaner times when his fund backed Valeant Pharmaceuticals, a disastrous bet that cost the hedge fund billions in losses.
“One of our learnings from past mistakes is to act promptly when we discover new information about an investment that is inconsistent with our original thesis. That is why we did so here,” he wrote.
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Reporting by Svea Herbst-Bayliss with additional reporting by Tiyashi Datta in Bengaluru; Editing by Sriraj Kalluvila, Bernard Orr
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April 19 (Reuters) – Billionaire entrepreneur Elon Musk tweeted a series of dashes for a missing word followed by “is the Night”, days after he offered to buy Twitter Inc (TWTR.N) for $43 billion.
The offer from Musk, who has hinted at the possibility of a hostile bid, has prompted the social media company to adopt a “poison pill” to protect itself.
Musk, who is also the chief executive of electric-vehicle maker Tesla Inc (TSLA.O), on Saturday tweeted “Love Me Tender”, an Elvis Presley song, after Twitter opted for a plan to sell shares at a discount to prevent any attempt by shareholders to amass a stake of more than 15%. Musk currently has a 9.1% stake. read more
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The New York Post on Tuesday reported Musk was willing to invest between $10 billion and $15 billion of his own money to take Twitter private, citing two sources familiar with the matter.
The billionaire, who is Twitter’s second-biggest shareholder, is planning to launch a tender offer in about 10 days and has tapped Morgan Stanley to raise another $10 billion in debt, according to the report.
Musk may also be willing to borrow against his current stake if necessary, a move that could possibly raise several billion additional dollars, according to the New York Post report.
Tesla CEO Elon Musk leaves Manhattan federal court after a hearing on his fraud settlement with the Securities and Exchange Commission (SEC) in New York City, U.S. April 4, 2019. REUTERS/Brendan McDermid
Twitter declined to comment. Tesla did not immediately respond to a Reuters request for comment from Musk.
More private-equity firms have expressed interest in participating in a deal for Twitter, people familiar with the matter told Reuters on Monday without naming the firm.
The interest emerged after Thoma Bravo, a technology-focused private-equity firm, contacted the social media platform last week to explore a buyout that would challenge Musk’s offer.
Apollo Global Management Inc (APO.N) is considering ways it can provide financing to any deal and is open to working with Musk or any other bidder, the sources told Reuters.
Many investors, analysts and investment bankers expect Twitter’s board to reject Musk’s offer in the coming days, saying it is inadequate.
(The story corrects to remove reference to potential return in paragraph 7.)
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Reporting by Sonia Cheema, Yuvraj Malik and Akriti Sharma in Bangalore; Editing by Anil D’Silva and Shounak Dasgupta
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Follows SEC backing for vote after guidance change
Filed by retail activist platform Tulipshare
LONDON, April 7 (Reuters) – Amazon.com Inc. (AMZN.O), the world’s biggest retailer, will face a shareholder vote calling for an independent audit of its treatment of warehouse workers after the top U.S. securities regulator turned down the company’s request to skip the resolution.
The decision means Amazon investors will get to vote on the issue for the first time, proponents said, taking advantage of guidance from the U.S. Securities and Exchange Commission in November that made it more supportive of votes on significant social issues. read more
Founded by billionaire Jeff Bezos, Amazon has drawn increasing criticism in recent years for its treatment of workers, including claims of poor working conditions at its warehouses and its attempts to block workers unionising. read more
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With investors globally pushing companies to look after their workforce as part of an increased focus on social issues, London-based retail investor activist platform Tulipshare helped file a resolution seeking to shine a light on Amazon’s practices.
Specifically, the proposal – filed under the name of a Tulipshare investor, Thomas Dadashi Tazehozi – asked the company to commission an independent audit and report on working conditions at the company.
While Amazon asked the SEC to let them refuse to put the resolution to a vote, claiming the issue relates to ordinary business operations, an April 6 letter from the SEC disagreed.
“In our view, the Tazehozi Proposal transcends ordinary business matters,” said the letter seen by Reuters.
Amazon declined to comment on the SEC response when contacted by Reuters. An annual general meeting of shareholders is scheduled for May 25.
A separate shareholder resolution seeking an audit on workplace health and safety submitted to the company by investors including the Domini Impact Equity Fund was not backed by the regulator, though.
Noting that the second resolution was “substantially duplicative” of the first, the SEC said there was some basis for the company’s request that it be allowed to skip the vote, and it would not recommend enforcement action if Amazon were to do so.
Last week some 55% of workers who cast a ballot at a warehouse in the New York City borough of Staten Island voted to form the first U.S. union at Amazon.
In its objection filed with the National Labor Relations Board, Amazon on Thursday accused the union, called the Amazon Labor Union, of threatening to act against staff unless they voted for organising. An attorney for the union called the assertion “really absurd.” read more
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Reporting by Simon Jessop, additional reporting by Ross Kerber; Editing by Mark Porter
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April 5 (Reuters) – Amazon.com Inc (AMZN.O) has secured rocket launches with three companies, the company said on Monday, as it spends billions on putting together a satellite constellation to beam broadband internet that will rival Elon Musk-owned SpaceX’s Starlink.
The e-commerce giant said its Project Kuiper has secured 83 launches over five years and includes a deal with Blue Origin, a company owned by Amazon founder and chairman Jeff Bezos.
The race to beam broadband internet using thousands of satellites in low earth orbit is heating up, with SpaceX so far gaining advantage over other players. Project Kuiper plans to launch its first two prototype satellites by year’s end.
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“Amazon is investing billions of dollars across the three agreements. Together, it is the largest commercial procurement of launch vehicles in history,” an Amazon spokesperson told Reuters.
The contract includes 18 launches with Arianespace’s Ariane 6 rockets, 12 launches with Blue Origin’s New Glenn – with an option to add up to 15 more – and 38 launches with the Vulcan Centaur rocket made by United Launch Alliance (ULA), a joint venture between Lockheed Martin (LMT.N) and Boeing Co (BA.N).
Together, they will provide capacity for the company to deploy the majority of its satellite constellation, the company said.
The deals are betting on three heavy-lift rockets that have yet to fly and whose development has been delayed. Arianespace’s Ariane 6, under development, could launch up to 40 Kuiper satellites each mission, said the company’s chief executive Stéphane Israël.
Also under development, Blue Origin’s New Glenn will carry 61 Kuiper satellites while ULA’s Vulcan will carry 45, the companies’ CEOs said Tuesday at a conference in Colorado Springs, Colorado.
Dave Limp, head of Amazon’s devices unit, said the company “wanted diversity in our launch partnerships,” which includes previously announced deals with ULA and rocket startup ABL Space.
“It’s the largest contract ever signed by Arianespace in its history,” ArianeGroup CEO André-Hubert Roussel told Reuters, declining to provide financial details. “It’s the result of two years and half of talks with them,” he said, adding that the launches would take place between 2024 and 2027.
Project Kuiper aims to use over 3,000 satellites in low earth orbit to beam high-speed, low-latency internet to customers, including households, businesses and government agencies.
Securing launch capacity from multiple providers reduces risks associated with launch vehicle stand-downs and saves costs that can be passed on to customers, said Rajeev Badyal, vice president of technology for Project Kuiper.
Blue Origin’s BE-4 engine, which will also power the Vulcan rocket, has faced multiple delays.
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Reporting by Akash Sriram in Bengaluru, additional reporting by Joey Roulette in Colorado Springs, Colorado and Mathieu Rosemain in Paris; Editing by Anil D’Silva and Nick Zieminski
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April 4 (Reuters) – Tesla Inc (TSLA.O) boss Elon Musk on Monday disclosed a 9.2% stake in Twitter Inc (TWTR.N), worth nearly $3 billion, making him the micro-blogging site’s largest shareholder and triggering a rise of more than 27% in the company’s shares.
Musk’s move, revealed in a regulatory filing, comes on the heels of his tweet that he was giving “serious thought” to building a new social media platform, while questioning Twitter’s commitment to free speech.
He also started a poll asking Twitter users if they want an edit button, a long-awaited feature on which the social media platform has been working. It was followed by Chief Executive Parag Agrawal urging users to “vote carefully”.
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Within two hours of starting the poll, more than 1.1 million users voted, with over 75% of them backing an edit option.
Last week, in another poll, Musk had asked if Twitter alogrithm should be open source. More than 82% of the users said yes, while former CEO Jack Dorsey said, “the choice of which algorithm to use (or not) should be open to everyone.”
A prolific Twitter user, Musk has over 80 million followers since joining the site in 2009 and has used the platform to make several announcements, including teasing a go-private deal for Tesla that landed him in hot water with regulators.
Of late, however, the world’s richest person has been critical of the social media platform and its policies, and recently ran a Twitter poll asking users if they believed the platform adheres to the principle of free speech, to which over 70% voted “no.” read more
In December, Musk put out a meme that compared CEO Agrawal with Soviet dictator Joseph Stalin and showed Jack Dorsey as a his close associate who was later on executed.
Twitter’s latest quarterly results and lower-than-expected user additions have raised doubts about its growth prospects, even as it pursues big projects such as audio chat rooms and newsletters to end long-running stagnation.
“It does send a message to Twitter … having a meaningful stake in the company will keep them on their toes, because that passive stake could very quickly become an active stake,” said Thomas Hayes, managing member at Great Hill Capital LLC.
Tesla CEO Elon Musk speaks during a conversation with legendary game designer Todd Howard (not pictured) at the E3 gaming convention in Los Angeles, California, U.S., June 13, 2019. REUTERS/Mike Blake
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Musk – who, according to Forbes, has a net worth of about $300 billion – has been reducing his stake in Tesla since November, when he said he would offload 10% of his holding in the electric-car maker. He has already sold $16.4 billion worth of shares since then.
A regulatory filing on Monday showed that Musk owns 73.5 million Twitter shares, which are held by the Elon Musk Revocable Trust, of which he is the sole trustee. Vanguard is Twitter’s second-biggest shareholder, with an 8.79% stake, according to Refinitiv data.
Twitter shares rose 27.1% on Monday to close at $49.97. The stock, which had fallen 38% in the past 12 months through Friday’s close, on Monday added as much as $8.38 billion to its market capitalization, which now stands at $39.3 billion.
BUYOUT?
“Musk’s actual investment is a very small percentage of his wealth and an all-out buyout should not be ruled out,” CFRA Research analyst Angelo Zino wrote in a client note.
The stake in Twitter is more likely to result in positive outcomes for shareholders than negative ones, said Ryan Jacob, chief executive officer of Jacob Asset Management, who said Twitter is one of the fund’s largest holdings.
“If (Musk) decides to take an active position and Twitter goes private, it will probably be at a higher price than it is now,” he said. “If it gets other companies interested (in acquiring Twitter), it’ll probably be at a higher price than right now.”
Musk has previously made early-stage investments in companies, including online payment processor Stripe Inc and artificial intelligence firm Vicarious.
He is also the founder and chief executive officer of SpaceX, and leads brain-chip startup Neuralink and infrastructure firm the Boring Company.
Twitter was the target of activist investor Elliott Management Corp in 2020, when the hedge fund argued the social networking company’s then-boss and co-founder, Jack Dorsey, was paying too little attention to Twitter while also running what was then called Square Inc (SQ.N).
Dorsey, who owns a stake of more than 2% in Twitter, stepped down as CEO and chairman in November last year, handing the reins to company veteran Parag Agrawal.
Meanwhile, Musk and Dorsey have found some common ground in dismissing the so-called Web3, a vague term for a utopian version of the internet that is decentralized. read more
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Reporting by Nivedita Balu, Eva Mathews, Akash Sriram, Praveen Paramasivam and Maria Ponnezhath in Bengaluru;
Additional reporting by Sheila Dang in Dallas and Hyun Joo Jin in San Francisco;
Editing by Anil D’Silva, Matthew Lewis, Rashmi Aich and Arun Koyyur
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A Tesla logo on a Model S is photographed inside of a Tesla dealership in New York, U.S., April 29, 2016. REUTERS/Lucas Jackson/File Photo
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April 2 (Reuters) – Tesla Inc (TSLA.O) on Saturday reported record electric vehicle deliveries for the first quarter, largely meeting analysts’ estimates, but production fell from the previous quarter as supply chain disruptions and a China plant suspension weighed.
“This was an *exceptionally* difficult quarter due to supply chain interruptions & China zero Covid policy,” Chief Executive Elon Musk tweeted. “Outstanding work by Tesla team & key suppliers saved the day.”
Tesla delivered 310,048 vehicles in the quarter, a slight increase from the previous quarter, and up 68% from a year earlier. Wall Street had expected deliveries of 308,836 cars, according to Refinitiv data.
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Tesla produced 305,407 vehicles from January to March, down from 305,840 the previous quarter.
Tesla, the world’s most valuable automaker, has navigated the pandemic and supply chain disruptions better than rivals and its new Shanghai factory has been driving growth.
But a recent spike in COVID-19 cases in China has forced Tesla to temporarily suspend production at the Shanghai factory for several days in March and April as the city locks down to test residents for the disease. read more
The deliveries were “better than feared given supply chain issues,” said Daniel Ives, an analyst at Wedbush, in a report.
Tesla said it sold a total of 295,324 Model 3 sedans and Model Y sport utility vehicles, while it delivered 14,724 Model S luxury sedans and Model X premium SUVs.
PRICE HIKE
Skyrocketing gas prices spurred by the Ukraine crisis is expected to fuel demand for electric cars, but lack of inventory and higher vehicle prices would weigh on sales, analysts said.
Tesla in March raised prices in China and the United States after Musk said the U.S. electric carmaker was facing significant inflationary pressure in raw materials and logistics after Russia’s invasion of Ukraine.
“Impressive (deliveries) given all the headwinds,” Gene Munster, managing partner at venture capital firm Loup Ventures, said, adding he expected Tesla to continue outperforming other automakers in sales growth.
Toyota and GM, Hyundai Motor on Friday reported lower first-quarter U.S. sales than a year earlier. read more
Musk said in October that Shanghai had surpassed its Fremont, California factory – the company’s first plant – in output. The two factories are critical for Tesla’s goal to boost deliveries by 50% this year, as production at its new factories are expected to ramp up slowly in their first year.
Tesla started delivering vehicles made at its factory in Gruenheide, Germany, in March and deliveries of cars made at its plant in Austin, Texas, were to begin in the near future.
The company’s stock soared after Tesla this week revealed plans to seek investor approval to increase its number of shares to enable a stock split. read more Tesla shares have risen about 3% so far this year, while GM and Ford shares have declined.
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Reporting by Hyunjoo Jin in San Francisco, Akash Sriram, Akriti Sharma in Bengaluru; Editing by Maju Samuel and Alistair Bell, Diane Craft and Richard Chang
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NEW YORK, March 22 (Reuters) – The top U.S. securities regulator on Tuesday urged a federal judge not to let Elon Musk escape an agreement requiring that his Twitter use be monitored, which the Tesla Inc (TSLA.O) chief executive considers part of a campaign of harassment.
In a filing in the federal court in Manhattan, the U.S. Securities and Exchange Commission said Musk had not met his “high burden” to set aside a 2018 consent decree requiring that Tesla lawyers approve tweets and other public statements that could be material to his electric car company.
It’s not enough that Musk found compliance “less convenient than he had hoped,” or wished the SEC would stop investigating Tesla’s disclosure procedures.
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“When it comes to civil settlements, a deal is a deal, absent far more compelling circumstances than are here presented,” the SEC said.
The regulatory agency also urged U.S. District Judge Alison Nathan, who oversees the decree, to reject Musk’s bid to quash a subpoena requesting records concerning his Twitter poll last November over whether to sell 10% of his Tesla stock.
Alex Spiro, a lawyer for Musk, declined to comment. Tesla did not immediately respond to a request for comment. Legal experts have said Musk is unlikely to have the decree set aside.
Earlier on Tuesday, Musk danced and joked with fans as he oversaw the opening of Tesla’s first European factory, located near Berlin, with German Chancellor Olaf Scholz in attendance. read more
Tesla also has a factory in Shanghai. The company has made Musk the world’s richest person, according to Forbes magazine.
The SEC dispute stems from the regulator’s claim that Musk defrauded investors on Aug. 7, 2018, by tweeting that he had “funding secured” to potentially take his electric car company private at a premium, when in reality a buyout was not close.
Tesla and Musk settled by each paying a $20 million civil fine, with Musk stepping down as Tesla’s chairman.
Musk has since accused the SEC of harassing him with “roving and unbound” investigations, in a bad-faith effort to punish him for criticizing the government and exercising his constitutional right to free speech under the First Amendment. read more
But the SEC said it has broad authority and a “legitimate purpose” to investigate Musk and Tesla, and that Musk could oppose the subpoena only through a subpoena enforcement action.
“Musk complains about ‘the sheer number of demands’ by the SEC from 2018 to the present, which he characterizes as harassment,” the SEC said.
“But Musk’s own chronology of alleged demands is both underwhelming and reflects legitimate inquiries as to new potentially violative conduct by Tesla and Musk,” it added.
The subpoena related to Musk’s tweet that he would offload 10% of his Tesla stake if users approved.
A majority did, and the poll caused Tesla’s share price to fall. Musk has since sold more than $16 billion of Tesla stock.
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Reporting by Jonathan Stempel in New York; Additional reporting by David Shepardson in Washington, D.C., Hyun Joo Jin in San Francisco, and Victoria Waldersee and Nadine Schimroszik in Gruenheide, Germany; editing by Jonathan Oatis
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Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc’s annual shareholder meeting in Omaha, Nebraska, U.S., May 4, 2019. REUTERS/Scott Morgan
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NEW YORK, March 21 (Reuters) – Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) has struck an agreement to buy insurance company Alleghany Corp (Y.N) for $11.6 billion, just weeks after the 91-year-old billionaire bemoaned a lack of good investment opportunities.
Alleghany, whose businesses include reinsurer Transatlantic Holdings, would expand Berkshire’s large portfolio of insurers, which includes auto insurer Geico, reinsurer General Re and a unit that insures against major catastrophes and unusual risks.
“Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years,” Buffett, who has run Berkshire since 1965, said in a statement.
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The acquisition, one of the five largest in Berkshire’s history, would reunite Buffett with Joseph Brandon, who led General Re from 2001 to 2008 and became Alleghany’s chief executive in December.
It would also end Buffett’s six-year drought of large acquisitions, and help him deploy some of the $146.7 billion of cash and equivalents his Omaha, Nebraska-based conglomerate had at year end.
Buffett lamented in his Feb. 26 annual shareholder letter that “internal opportunities deliver far better returns than acquisitions,” and that little “excites us” in equity markets. read more He pledged to keep $30 billion of cash on hand.
Berkshire agreed to pay $848.02 in cash per Alleghany share, a 25% premium over Friday’s closing price.
Alleghany has a 25-day “go-shop” period to find a better offer. Berkshire does not get involved in bidding wars.
The transaction is expected to close in the fourth quarter pending regulatory and Alleghany shareholder approvals. Alleghany would operate as an independent Berkshire unit.
Berkshire “epitomizes our long-term management philosophy,” Brandon said in a statement.
Insurance typically generates more than 20% of operating profit at Berkshire, whose dozens of businesses also include the BNSF railroad, Berkshire Hathaway Energy and Dairy Queen ice cream.
Berkshire also invests hundreds of billions of dollars in stocks such as Apple Inc (AAPL.O), and has this year invested more than $6.4 billion in Occidental Petroleum Corp . read more
New York-based Alleghany was founded in 1929 by railroad entrepreneurs Oris and Mantis Van Sweringen.
It was transformed into an insurance and investment operating company under Fred Morgan Kirby II’s leadership from 1967 to 1992.
Alleghany is sometimes thought of as a mini-Berkshire, and Buffett said the companies had “many similarities.”
Other Alleghany units include RSUI Group, an underwriter of wholesale specialty insurance, and CapSpecialty, a specialty insurer.
Goldman Sachs and law firm Willkie Farr & Gallagher advised Alleghany on the transaction. Law firm Munger, Tolles & Olson advised Berkshire.
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Reporting by Noor Zainab Hussain in Bengaluru and Jonathan Stempel in New York Additional reporting by Mehnaz Yasmin in Bengaluru
Editing by Saumyadeb Chakrabarty and Mark Potter
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