Y - Here's Why Alleghany Is Soaring Today
The share price of insurance company Alleghany (NYSE: Y) skyrocketed on Monday morning. As of 10 a.m. ET, the stock was up by 25% for the day, while the S&P 500 was modestly in the red.
What's driving Alleghany's upward move is simple and obvious. Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has agreed to buy it for $11.6 billion in cash, which works out to $848.02 per share.
This will be Berkshire's biggest acquisition since it picked up Precision Castparts in 2016, and it appears to be an excellent fit for the conglomerate. Insurance has been a cornerstone of Berkshire's business for decades, with GEICO, General Re, and several other insurance subsidiaries already operating under its umbrella. It's also paying a relatively modest premium to Alleghany's book value.
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Here's Why Alleghany Is Soaring Today