Berkshire Hathaway plans to buy Alleghany for $11.6 billion 💰
Monday, 21st March 2022 by Gotrade
Hey Gotraders,
Mr. Warren Buffett’s company Berkshire Hathaway (BRK.B) is making headline news again this week. He has decided to buy Alleghany Corp for $11.6 billion. We double-checked the figure this time 😉
Berkshire Hathaway offered $848.02 for each share of Alleghany = a premium of more than 25% to the company's closing price on Friday.
This transaction would mark Berkshire’s biggest acquisition since 2016 - which was to acquire Precision Castparts for $37 billion, including debt.
Who is Alleghany? Alleghany is an insurance company, and the owner of reinsurer TransRe. They operate mainly in property and casualty reinsurance and insurance through subsidiaries and investments.
Is the insurance biz new to Berkshire Hathaway? The answer to that question is no. Berkshire Hathaway already has a large insurance portfolio, which includes Geico auto insurance and General Re reinsurance to name a couple.
“Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years" - Warren Buffett.
Why is this important? Berkshire Hathaway had a massive cash pile of over $146 billion at the end of 2021. They were looking for good companies to invest in. Looks like they found one!
The deal is expected to close in Q4 of 2022, and Alleghany will operate independently, as part of Berkshire Hathaway after the deal closes.
Shares of Berkshire Hathaway Class B shares closed at $342.41, up 13.84% year-to-date.
📈 XPeng plans to hike vehicle prices 🆙
Everyone’s increasing prices. First Rivian (RIVN) announced price hikes, then Tesla (TSLA). Now XPeng (XPEV) is the latest EV company to announce price hikes. The cost of raw materials, especially nickel which is a key component of batteries is just getting too expensive for manufacturers to absorb. These price increases are being passed on to the consumers. Not good.
XPeng will be raising prices on its cars ranging from 10,100 Chinese yuan to 20,000 yuan before subsidies. They did not elaborate further on the specific price increases for each model.
Shares of XPeng closed at $28.77, up 15.17% for the day.
📈 Apple might be partnering with Porsche 🏎️
Oooh la la, some exciting news. Rumor has it that sports car maker Porsche might be partnering with Apple (AAPL). Apparently, some execs from Porsche traveled to the U.S. to meet with a few tech companies last year, and one of them was Apple.
Porsche’s CEO said that Porsche has discussed some "exciting common projects" with Apple, but it is currently too soon to make any firm decisions on future projects.
“We already have Apple CarPlay, we will expand on that…” Oliver Blume, CEO of Porsche. He also went on to say that Porsche & Apple traditionally had a good relationship and that they were “on the same wavelength.” Uh uh….
His comments were vague, which led to people speculating about the possibility of a joint EV. It is a known fact that Apple has wanted to build its own Apple Car for a while now, and they were seeking an established carmaker as a partner to manufacture its Apple Car. Could Porsche be that manufacturer? Hmmm...
Do note that all of this is speculation!
Shares of Apple closed at $163.98, up 2.09% for the day.
Top movers & shakers 🎢
What else is making headline news 📰
Morning Bid: Oil prices fuel the tightening dilemma further.
Chevron (CVX) pulls union workers from California refinery ahead of strike.
The Station: General Motors (GM) deepens its stake in Cruise and Porsche plots out its EV course.
Nike (NKE) earnings, consumer sentiment: What to know in markets this week.
Popular companies releasing earnings this week 💰
Monday: Nike (NKE), AngloGold (AU), Tencent Music (TME), AST SpaceMobile (ASTS)
Tuesday: Adobe (ADBE), Carnival (CCL)
Wednesday: Exelon (EXC), Cintas (CTAS), Prudential plc (PUK), General Mills (GIS), Trip.com (TCOM), The Honest Co (HNST), Rent the Runway (RENT)
Thursday: PetroChina (PTR), NIO (NIO), Darden Restaurants (DRI), Synnex (SNX), Sinopec Shanghai (SHI), Orion Office REIT (ONL)
A company’s market value may fluctuate considerably around the time that the earnings report is expected to be published. Stock prices may rise or fall according to analysts' speculative estimates, released prior to the actual earnings announcement.
The earnings season can be a time of great opportunity since better-than-expected figures could cause a company’s stock to greatly increase in value. Worse-than-expected results could have the opposite effect.
That’s all from us for now.
Signing out,
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