Merger Arbitrage Mondays – Berkshire Hathaway Acquires Insurer Alleghany For $11.6 Billion

  • March 28, 2022

Merger activity decreased last week with three new deals announced and two deals completed.

Alleghany Corporation (Y)

Incorporated in 1929 and based in New York, Alleghany Corporation was originally created as a holding company for railroad interests by railroad entrepreneurs Oris and Mantis Van Sweringen. Alleghany operates in three segments: reinsurance, insurance, and Alleghany Capital, providing property and casualty reinsurance and insurance products in the United States and internationally.

Berkshire Hathaway (BRK.ABRK.B) announced last week that it will acquire all outstanding Alleghany shares for $848.02 per share in cash, for a total equity value of approximately $11.6 billion, representing a premium of 29% to Alleghany’s average stock price over the last 30 days. The transaction aligns well with Berkshire’s interests in both insurance and reinsurance.

According to an article from S&P Global, “Another element that makes the $11.6 billion deal attractive to Berkshire is that Alleghany has a brokered reinsurance unit, whereas The Berkshire Hathaway Reinsurance Group, the company’s reinsurance arm, sells directly to clients. A quota share with Alleghany’s reinsurance company has given Berkshire good insight into the business and increased its broker market distribution, UBS analyst Brian Meredith said in a note.

This deal will also unite Warren Buffett with his ‘long time friend’, Alleghany CEO Joe Brandon. Brandon was the CEO of General Re from 2001 to 2008 before joining Alleghany as the president of its insurance group in 2011.

This is one of the five largest acquisitions in Berkshire’s history and it ends Buffett’s six year drought of large acquisitions.

Source: S&P Global Market Intelligence

After the transaction is completed, Alleghany will operate as an independent unit of Berkshire. The agreement includes a 25-day “go-shop” period, during which Alleghany may solicit other acquisition offers. According to the merger agreement, no break-up fee would be owed to either party if the merger fell through.

You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.

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Deals In The Works

There was one new deal announced in the Deals in the Works section last week.

On March 21, 2022, Switch (SWCH) a data-center operator announced that, it is exploring strategic options including a sale.

On March 25, 2022, Bloomberg reported that Gulfport Energy (GPOR) had discussed merging with rival oil and gas explorer Ascent Resources. We had added Gulfport Energy as a potential deal in the works on September 23, 2021, when Reuters had reported that, after emerging from bankruptcy earlier in 2021, the company was exploring strategic options including a possible sale. GPOR’s price after this announcement was $79.98.

SPAC Arbitrage

There was one new SPAC IPO filed and four new SPAC combinations announced last week. You can find the new SPAC IPO announcements in our SPACs tool here.

  1. Coincheck, a multi-cryptocurrency marketplaces and digital asset exchanges in Japan by verified account market share, and Thunder Bridge Capital Partners IV, Inc. (THCPentered into a definitive agreement for a business combination.
  2. HUB Cyber Security (Israel) Limited, a Tel-Aviv based developer of Confidential Computing cybersecurity solutions and services, and Mount Rainier Acquisition (RNER) have entered into a definitive business combination agreement.
  3. Lanvin Group, a global luxury fashion group and Primavera Capital Acquisition Corporation (PVentered into a definitive business combination agreement.
  4.  Ligand Pharmaceuticals Incorporated (LGNDannounced the signing of a definitive merger agreement with Avista Public Acquisition Corp. II (AHPA), providing for the spin-off of OmniAb, Inc., Ligand’s antibody discovery business, immediately followed by a merger with a newly formed subsidiary of APAC.

Weekly Spread Changes:

The table below shows weekly spread changes between March 18 and March 25, 2022.

Company Quote
Last Week
Spread Change
MBII1.08Bioceres Crop Solutions Corp. (BIOX)13.8612.93%7.05%5.88%All Stock
GFED32.12QCR Holdings, Inc. (QCRH)57.34.85%0.00%4.85%All Stock
PTRS9.46OceanFirst Financial Corp. (OCFC)21.029.73%7.56%2.17%Special Conditions
TEN17.88Apollo Global Management, Inc. (APO)62.511.86%10.44%1.42%All Cash
OCDX18.15Quidel Corporation (QDEL)109.22.81%1.80%1.01%Cash Plus Stock
FHN23.4The Toronto-Dominion Bank (TD)81.716.84%8.65%-1.81%Special Conditions
VNE36.84Qualcomm Incorporated (QCOM)157.970.43%2.35%-1.92%All Cash
SJR31.41Rogers Communications Inc. (RCI)54.643.15%5.57%-2.42%Special Conditions
JOBS54.05Garnet Faith Limited (N/A)12.86%15.97%-3.11%All Cash
AZPN157.85Emerson Electric Co. (EMR)98.511.36%9.48%-8.12%Special Conditions

Deal Statistics:

Total Number of Deals Closed in 202245
Total Number of Deals Not Completed in 20223
Total Number of Pending Deals
Cash Deals44
Stock Deals14
Stock & Cash Deals10
Special Conditions8
Total Number of Pending Deals76
Aggregate Deal Consideration$672.22 billion

New Deals:

  1. The acquisition of Alleghany Corporation (Y) by Berkshire Hathaway (BRK.ABRK.B) for $11.6 billion or $848.02 per share in cash.
  2. The acquisition of Huttig Building Products (HBP) by Woodgrain for $350 million or $10.70 per share in cash.
  3. The merger of Emclaire Financial Corp (EMCF) and Farmers National Banc (FMNB) for $105 million in a cash or stock deal. Under the terms of the agreement, each shareholder of Emclaire may elect to receive either $40.00 per share in cash or 2.15 shares of Farmers’ common stock, subject to an overall limitation of 70% of the shares being exchanged for Farmers’ shares and 30% for cash.

Deal Updates:

  1. On March 21, 2022, Preferred Apartment Communities (APTSannounced the expiration of the 30-day “go-shop” period set forth in the previously announced definitive merger agreement with Blackstone Real Estate Income Trust.
  2. On March 21, 2022, Activision Blizzard (ATVI) announced that the special meeting of stockholders, to consider and vote on a proposal to adopt the Agreement and Plan of Merger with Microsoft Corporation (MSFT), will be held on April 28, 2022.
  3. On March 22, 2022, Guaranty Federal Bancshares (GFED) stockholders approved the previously announced acquisition of the company by QCR Holdings (QCRH) at a special shareholders meeting.
  4. On March 23, 2022, in connection with the Merger and the FTC review process, Intersect ENT (XENT) and Hemostasis have agreed on the material terms of a Sale and Purchase Agreement, under which Hemostasis would agree to acquire the Fiagon Business from Intersect ENT. Intersect ENT and Medtronic (MDT) also anticipate providing certain transition services in connection with the sale of the Fiagon Business. The consummation of the sale of the Fiagon Business to Hemostasis would be expressly cross-conditioned on the closing of the Merger.
  5. On March 23, 2022, Guaranty Federal Bancshares (GFED) announced that QCR Holdings (QCRHhas received all of the regulatory approvals required to complete its previously announced merger with the company. The Merger remains subject to, the satisfaction of other customary closing conditions and is anticipated to close on April 1, 2022.
  6. On March 24, 2022, Veoneer (VNE) and QUALCOMM Incorporated (QCOM) have agreed that the closing of the merger will take place on April 1, 2022. Upon the closing of the merger, VeoSneer’s new owners, SSW, plan to appoint Jacob Svanberg, currently Senior Vice President Lidar Product Area and Corporate Development, as Veoneer’s new CEO.
  7. On March 24, 2022, Shareholders of Apria (APRapproved the company’s merger with Owens & Minor (OMI) at a special meeting of shareholders.
  8. On March 25, 2022, Citizens Financial Group (CFG) and Investors Bancorp (ISBCannounced receipt of regulatory approval from the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency to complete the previously announced acquisition of Investors. The acquisition is anticipated to close by mid-April 2022..

Closed Deals:

  1. The acquisition of BioDelivery Sciences International (BDSI) by Collegium Pharmaceutical (COLL) on March 22, 2022. It took 36 days for this deal to be completed.
  2. The acquisition of CyrusOne (CONE) by KKR and Global Infrastructure Partners on March 25, 2022. It took 130 days for this deal to be completed.

Top 10 deals with largest spreads:

ATVI01/18/2022Microsoft Corporation (MSFT)$95.00$79.606/30/202319.35%15.38%
CHNG01/06/2021UnitedHealth Group Incorporated (UNH)$25.75$21.9706/30/202217.21%66.81%
MBII03/16/2022Bioceres Crop Solutions Corp. (BIOX)$1.22$1.0809/30/202212.93%25.38%
JOBS06/21/2021Garnet Faith Limited (N/A)$61.00$54.0506/30/202212.86%49.93%
SAFM08/09/2021Cargill and Continental Grain Company (N/A)$203.00$180.5406/30/202212.44%48.31%
BRG12/20/2021Blackstone Real Estate (N/A)$29.85$26.5906/30/202212.26%47.61%
TEN02/23/2022Apollo Global Management, Inc. (APO)$20.00$17.8812/31/202211.86%15.57%
ATC07/01/2021MKS Instruments, Inc. (MKSI)$24.79$22.4103/31/202210.62%1291.95%
WLL03/07/2022Oasis Petroleum Inc. (OAS)$95.57$87.0612/31/20229.78%12.84%
PTRS11/04/2021OceanFirst Financial Corp. (OCFC)$10.38$9.4606/30/20229.73%37.76%

List of all pending deals:

The list of all pending deals is only available to InsideArbitrage Premium and Plus members.

Target VolumeEstimated
Closing Date
+RNDB3/28/22Hometown Financial Group, Inc. (N/A)All Cash$146.5 M$27.00$21.1819,55912/31/2227.48%36.21%
+TMX12/14/21Rentokil Initial plc (RTOKY)Special Conditions$6.7 B$55.00$46.02472,09212/31/2219.51%25.71%
+ATVI1/18/22Microsoft Corporation (MSFT)All Cash$68.7 B$95.00$80.016,116,0346/30/2318.74%14.93%
+CHNG1/06/21UnitedHealth Group Incorporated (UNH)All Cash$13.28 B$25.75$22.243,180,5626/30/2215.78%61.94%
+MBII3/16/22Bioceres Crop Solutions Corp. (BIOX)All Stock$236 M$1.18$1.03710,4289/30/2214.23%28.07%
+BRG12/20/21Blackstone Real Estate (N/A)Special Conditions$3.6 B$29.85$26.6726,2256/30/2212.22%47.95%
+JOBS6/21/21Garnet Faith Limited (N/A)All Cash$3.63 B$61.00$54.48396,3226/30/2211.97%46.97%
+SAFM8/09/21Cargill and Continental Grain Company (N/A)All Cash$4.49 B$203.00$181.54150,3356/30/2211.82%46.39%
+TEN2/23/22Apollo Global Management, Inc. (APO)All Cash$7.1 B$20.00$17.951,146,35612/31/2211.42%15.05%
+WLL3/07/22Oasis Petroleum Inc. (OAS)Cash Plus Stock$2.82 B$90.35$81.45531,09512/31/2210.92%14.40%
+PTRS11/04/21OceanFirst Financial Corp. (OCFC)Special Conditions$186 M$10.38$9.427,0496/30/2210.43%40.92%
+ATC7/01/21MKS Instruments, Inc. (MKSI)Cash Plus Stock$6.5 B$24.81$22.61892,1093/31/229.75%1779.40%
+SAVE2/07/22Frontier Group Holdings, Inc. (ULCC)Cash Plus Stock$6.6 B$23.91$21.932,716,56512/31/229.05%11.92%
+TSEM2/15/22Intel Corporation (INTC)All Cash$5.4 B$53.00$48.651,047,1582/15/238.94%10.10%
+MILE11/08/21Lemonade (LMND)All Stock$201.47 M$1.42$1.31723,3136/30/228.45%33.17%
+PNM10/21/20Avangrid, Inc. (AGR)All Cash$8.05 B$50.30$46.66275,8686/30/227.80%30.62%
+PBIP3/02/22Fulton Financial Corporation (FULT)All Cash$142.1 M$18.01$16.7514,0659/30/227.52%14.84%
+FHN2/28/22The Toronto-Dominion Bank (TD)Special Conditions$13.4 B$25.00$23.425,224,18211/27/226.75%10.13%
+TGNA2/22/22Standard General L.P. (N/A)Special Conditions$8.6 B$24.00$22.51,160,29512/31/226.67%8.78%
+ZNGA1/10/22Take-Two Interactive Software, Inc. (TTWO)Special Conditions$12.7 B$9.86$9.2622,065,0186/30/226.48%25.43%
+CDR3/02/22Wheeler Real Estate Investment Trust, Inc. (WHLR)All Cash$291.3 M$29.00$27.3783,0316/30/225.96%23.37%
+NPTN11/04/21Lumentum Holdings Inc. (LITE)All Cash$745.24 M$16.00$15.13262,41812/31/225.75%7.58%
+SJI2/24/22Infrastructure Investments Fund (N/A)All Cash$8.1 B$36.00$34.13507,28712/31/225.48%7.22%
+COHR3/25/21II-VI Incorporated (IIVI)Cash Plus Stock$6.84 B$286.85$272.05187,1835/31/225.44%31.52%
+VG11/22/21Ericsson (ERIC)All Cash$6.2 B$21.00$20.24,698,0156/30/223.96%15.54%
+SJR3/15/21Rogers Communications Inc. (RCI)Special Conditions$26 B$32.40$31.19259,0126/30/223.88%15.23%
+MGI2/15/22Madison Dearborn Partners, LLC (N/A)All Cash$1.8 B$11.00$10.591,690,10312/31/223.87%5.10%
+GFED11/09/21QCR Holdings, Inc. (QCRH)All Stock$151.6 M$33.34$32.136,3804/01/223.76%457.12%
+CCMP12/15/21Entegris, Inc. (ENTG)Cash Plus Stock$6.5 B$194.97$188.25177,27012/31/223.57%4.70%
+HTA2/28/22Healthcare Realty Trust Incorporated (HR)Cash Plus Stock$10.74 B$32.50$31.511,760,7249/30/223.14%6.20%
+MNDT3/08/22Alphabet Inc. (GOOG)All Cash$5.4 B$23.00$22.33,261,11612/31/223.14%4.14%
+CTXS1/31/22Vista Equity Partners and Elliott Investment Management LP (N/A)All Cash$16.5 B$104.00$101.021,168,2646/30/222.95%11.58%
+EXTN1/24/22Enerflex Ltd. (EFX.TO)All Stock$735 M$6.67$6.48115,0729/30/222.88%5.69%
+OCDX12/23/21Quidel Corporation (QDEL)Cash Plus Stock$8.33 B$18.83$18.39575,3876/30/222.41%9.45%
+MTOR2/22/22Cummins Inc. (CMI)All Cash$3.7 B$36.50$35.68875,97712/31/222.30%3.03%
+SUMR3/16/22Kids2, Inc. (N/A)All Cash$97.44 M$12.00$11.7412,7646/30/222.21%8.69%
+GCP12/06/21Saint-Gobain (N/A)All Cash$2.3 B$32.00$31.36121,88412/31/222.04%2.69%
+UMPQ10/12/21Columbia Banking System, Inc. (COLB)All Stock$4.5 B$19.94$19.581,131,8436/30/221.85%7.24%
+STXB11/19/21Simmons First National Corporation (SFNC)All Stock$581 M$27.69$27.245,4846/30/221.81%7.11%
+IIN2/28/22Altaris Capital Partners, LLC (N/A)All Cash$183.22 M$24.25$23.8319,7136/30/221.76%6.92%
+NSEC1/26/22VR Insurance Holdings, Inc. (N/A)All Cash$41.4 M$16.35$16.071,7896/30/221.74%6.84%
+ROG11/02/21DuPont de Nemours, Inc. (DD)All Cash$5.2 B$277.00$272.3594,7746/30/221.71%6.70%
+FBC4/26/21New York Community Bancorp, Inc. (NYCB)All Stock$2.6 B$43.89$43.19171,7673/31/221.61%293.69%
+CERN12/20/21Oracle Corporation (ORCL)All Cash$28.4 B$95.00$93.62928,16612/31/221.47%1.94%
+PLAN3/20/22Thoma Bravo (N/A)All Cash$10.7 B$66.00$65.0616,435,6116/30/221.44%5.67%
+CNR3/07/22Clayton, Dubilier & Rice (N/A)All Cash$5.8 B$24.65$24.332,353,1529/30/221.32%2.59%
+ECOL2/09/22Republic Services, Inc. (RSG)All Cash$2.2 B$48.00$47.38749,7296/30/221.31%5.14%
+FOE5/11/21Prince International Corporation (N/A)All Cash$2.1 B$22.00$21.74308,2676/30/221.20%4.69%
+REGI2/28/22Chevron Corporation (CVX)All Cash$2.75 B$61.50$60.842,197,68912/31/221.08%1.43%
+XENT8/06/21Medtronic plc (MDT)All Cash$1.1 billion$28.25$27.95126,3273/31/221.07%195.89%
+WBT7/14/21Ali Holding S.r.l. (N/A)All Cash$4.8 B$24.00$23.75528,5406/30/221.05%4.13%
+TLMD2/03/22Patient Square Capital (N/A)All Cash$106.42 M$3.00$2.97337,3996/30/221.01%3.96%
+ESBK10/04/21Community Bank System, Inc. (CBU)All Cash$82.8 M$23.10$22.922,6763/31/220.79%143.32%
+TSC10/20/21Raymond James Financial, Inc. (RJF)Cash Plus Stock$1.1 B$33.83$33.61129,1906/30/220.65%2.57%
+MIME12/07/21Permira (N/A)All Cash$5.8 B$80.00$79.48735,5176/30/220.65%2.57%
+AZPN10/11/21Emerson Electric Co. (EMR)Special Conditions$12.34 B$160.00$159.25312,2906/30/220.47%1.85%
+ANAT8/09/21Brookfield Asset Management Reinsurance Partners Ltd. (BAMR)All Cash$5.1 B$190.00$189.1397,0406/30/220.46%1.81%
+EPAY12/17/21Thoma Bravo (N/A)All Cash$2.6 B$57.00$56.75399,5916/30/220.44%1.73%
+VOLT3/14/22Vega Consulting, Inc. (N/A)All Cash$181.81 M$6.00$5.975198,9386/30/220.42%1.64%
+APTS2/16/22Blackstone Real Estate Income Trust, Inc. (N/A)All Cash$5.8 B$25.00$24.92,376,1716/30/220.40%1.58%
+VNE10/04/21Qualcomm Incorporated (QCOM)All Cash$3.87 B$37.00$36.882,378,3724/01/220.33%39.59%
+HBP3/21/22Woodgrain Inc. (N/A)All Cash$350 M$10.70$10.67581,2996/30/220.28%1.10%
+NP3/28/22Schweitzer-Mauduit International, Inc. (SWM)All Stock$1.18 B$40.29$40.2254,16412/31/220.23%0.30%
+FLOW12/13/21Lone Star Funds (N/A)All Cash$3.8 B$86.50$86.33272,3046/30/220.20%0.77%
+HMHC2/22/22Veritas Capital (N/A)All Cash$2.8 B$21.00$20.963,746,6046/30/220.19%0.75%
+GSKY9/15/21The Goldman Sachs Group (GS)All Stock$2.24 B$10.06$10.048,571,0583/31/220.19%34.54%
+VRS12/19/21BillerudKorsnäs AB (N/A)All Cash$825 M$27.00$26.96305,8646/30/220.15%0.58%
+Y3/21/22Berkshire Hathaway (BRK.A)All Cash$11.6 B$848.02$846.8119,40312/31/220.14%0.19%
+BPMP12/20/21BP p.l.c. (BP)All Stock$2.45 B$17.21$17.19150,4123/31/220.11%20.97%
+GNOG8/09/21DraftKings Inc. (DKNG)All Stock$1.52 B$6.81$6.8586,6843/31/220.11%19.46%
+LEVL11/04/21First Merchants Corporation (FRME)Cash Plus Stock$323.5 M$40.59$40.5723,6656/30/220.06%0.23%
+POLY3/28/22HP Inc. (HPQ)All Cash$3.3 B$40.00$39.9927,820,43312/31/220.03%0.03%
+APR1/10/22Owens & Minor, Inc. (OMI)All Cash$1.62 B$37.50$37.5436,7276/30/220.00%0.00%
+ISBC7/28/21Citizens Financial Group, Inc. (CFG)Cash Plus Stock$3.5 B$15.62$15.631,630,5684/15/22-0.04%-0.83%
+PBCT2/22/21M&T Bank Corporation (MTB)All Stock$7.6 B$21.17$21.183,758,7664/01/22-0.06%-6.88%
+MGP8/04/21VICI Properties Inc. (VICI)All Stock$17.2 billion$38.06$38.31,254,3816/30/22-0.64%-2.49%
+ABTX11/10/21CBTX, Inc. (CBTX)All Stock$1.5 B$44.69$45.1344,5476/30/22-0.97%-3.79%
+EMCF3/24/22Farmers National Banc Corp. (FMNB)All Stock$105 M$37.41$38.1414,92112/31/22-1.91%-2.52%


Multiple deals received required approvals as we come closer to the end of the first quarter of 2022. SPAC IPOs continue to dwindle with only one SPAC IPO filed last week. SPAC business combinations on the other hand kept up pace with four new combinations announced last week. One of the SPAC business combinations announced last week is structured as a ‘Reverse Morris Trust’. Ligand Pharmaceuticals (LGND) signed a definitive merger agreement with Avista Public Acquisition Corp. II (AHPA), providing for the spin-off of OmniAb, which will be merged with a newly formed subsidiary of APAC. The combined company will be led by Ligand’s President, Matt Foehr, and will be renamed “OmniAb, Inc.”.

Disclaimer: I have long positions in Berkshire Hathaway (BRK.ABRK.B), First Horizon (FHN), Tower Semiconductor (TSEM), Healthcare Trust of America (HTA), TEGNA (TGNA) and Bluerock Residential Growth REIT (BRG). Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.