Berkshire Hathaway to take $1.8bn stake in Tokio Marine - Financial Times

[https://www.ft.com/content/0ef092c4-01bf-4331-8fbe-99bd15ed5f27?syn-25a6b1a6=1](https://www.ft.com/content/0ef092c4-01bf-4331-8fbe-99bd15ed5f27?syn-25a6b1a6=1) *Berkshire Hathaway has agreed to invest $1.8bn in Tokio Marine as the new chief executive at the US conglomerate expands a bet on Japan kicked off by Warren Buffett.* *As part of a wide-ranging deal announced on Monday, a subsidiary of Berkshire will buy a 2.5 per cent strategic stake in Tokio Marine, one of the “big three” Japanese non-life insurers.* *The US company will reinsure a percentage of all the business done by the Japanese group and the two groups said they would “collaborate on global strategic investment opportunities, including M&A”.* *The move to invest in Tokio Marine marks a new Japan venture for Berkshire and may give the wider Tokyo market a lift.* *It comes six years after Buffett, the legendary investor who led Berkshire for decades, bought into trading houses such as Mitsubishi Corporation, Itochu and Mitsui.* *Berkshire, which also has a large stake in US insurer Chubb, has agreed “not to acquire more than 9.9 per cent” of outstanding Tokio Marine shares without agreement from the Japanese company’s board of directors.* *According to people briefed on the deal, Berkshire and Tokio Marine will use their combined firepower to hunt for global deals. There are no particular targets identified as of yet.* *The two companies have agreed that for five years neither will pursue similar strategic agreements with other Japanese non-life insurers. Berkshire will continue to reinsure other Japanese customers as usual.* *Berkshire is going through its own period of upheaval after Greg Abel took over as chief executive from Buffett at the start of the year.* *The company earlier this month started buying its own shares for the first time in almost two years as Abel looks to deploy a record cash pile of nearly $400bn.* *Berkshire, which spans insurance, railways and industrial businesses, has made its investment in Tokio Marine and the trading houses through the same vehicle: the National Indemnity Company.* *Buffett has lavished praise on the Japanese trading houses for their strong allocation of capital across a smorgasbord of sectors and as beneficiaries from geopolitical tensions between the US and China.* *He initially bought small stakes, first disclosed in 2020, and last year negotiated the removal of a 10 per cent cap on Berkshire’s ownership.* *Trading house executives had been nervous Abel might waver on Berkshire’s vow to hold their stocks for decades, which could diminish the Buffett halo effect on their share prices.* *But Abel assuaged those worries by signalling support for the holdings in his inaugural annual shareholder letter issued last month.* *In that same letter, Berkshire warned of headwinds facing the insurance sector that probably meant it would “write less property and casualty business for a period of time”.*