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Buffett’s Berkshire Hathaway in talks to acquire IRB Brasil Re stake: Reports

25th July 2017 - Author: Luke Gallin

Bloomberg has reported that Warren Buffett’s Berkshire Hathaway is in talks to acquire a stake in Brazilian reinsurer, IRB Brasil Resseguros S.A. (IRB Brasil Re), after the Rio de Janeiro-based firm launched an initial public offering (IPO) on Friday July 7th, 2017.

Berkshire Hathaway logoReinsurance News reported that IRB Brasil Re, Brazil’s largest reinsurance company, had filed for an IPO earlier this year, with the offering launching in early July. 

And now, according to reports from Bloomberg citing two people with direct knowledge of the matter that asked for anonymity, Berkshire Hathaway is in talks to buy a stake in the Latin America focused reinsurer.

IRB Brasil Re’s pricing date is set for July 27th, 2017, but according to the sources any deal with Buffett’s Berkshire Hathaway, which the two people say could be completed through Berkshire’s General Re division, is unlikely to happen before this date.

It was previously estimated that the IPO value IRB Brasil Re at between $2.5 billion to $3.2 billion, with shareholders having pressed for a floor of around $2.4 billion. According to Bloomberg, current shareholders will sell stakes in the IPO, which could raise up to $920 million.

The Brazilian government holds a 27% stake in the firm, and Bloomberg reports that it expects to keep this at 17% after the IPO, ensuring it has a “golden share.”

Bloomberg reports that a spokesperson for General Re and Buffett declined to comment, as did representatives for IRB and J.P. Morgan, the latter of which is advising the reinsurer.

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