THE HAGUE, Germany, (Reuters) – Even as Warren Buffett resisted paying Alleghany Corp's banking charge of $11.6 billion, Berkshire Hathaway Inc. completed its largest acquisition in six years in just two weeks, according to a regulatory filing on Monday.
When Buffett and Alleghany CEO Joseph Brandon had dinner together on March 7 in New York City, Alleghany alleged Buffett made a "informal offer" of $850 per share in cash minus Goldman Sachs' fee.When Brandon and Alleghany Chairman Jefferson Kirby met with Berkshire CEO Warren Buffett just five days later, they asked Buffett for a larger offer, to pay Goldman's $27 million fee, or to use Berkshire shares to fund part of the transaction.
Buffett reaffirmed the parameters of his original offer, suggesting explicitly that he did not intend to change his position on these topics, the filing claimed.
Berkshire agreed to pay $848.02 per share, with the $1.98 difference from $850 accounting for Goldman's fee.Announcing the merger was made on March 21, 2014. There were 25 days for Alleghany to locate a better deal. There have since been 31 inquiries from Goldman to potential bidders, according to the document. By the 14th of April, the "go-shop" time will have concluded.
Berkshire's General Re unit was under Brandon's command from 2001 till 2008.
Buffett, who is now 91, has long been critical of Wall Street's high transaction costs.
At Berkshire Hathaway, he relies on 98-year-old Vice Chairman Charlie Munger for advice on big capital choices, avoiding investment banks.
After working with him on the acquisition of food distributor McLane Co from Walmart Inc. and a major share in truck stop operator Pilot Flying J from billionaire Jimmy Haslam's family, Buffett complimented former Goldman banker Byron Trott.If regulators and Alleghany shareholders approve the deal, it should finalize in the fourth quarter.
Precision Castparts, a manufacturer of aerospace and industrial parts, was Berkshire Hathaway's most recent large acquisition in 2016, and it cost $32.1 billion.
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