TOKYO, Japan: Tokio Marine Holdings said on March 23 that it will enter a strategic partnership with Warren Buffett's Berkshire Hathaway, starting with the sale of a small stake to the U.S. conglomerate.
The Japanese insurer will initially sell a 2.49 percent stake through a third-party allotment of treasury shares, it said in a filing.
Berkshire Hathaway, in 2019, began investing in Japanese trading companies, and the firm has increased its stakes multiple times since then.
Tokio Marine said the partnership would expand its ability to take on risk and support future growth. At the same time, Berkshire's core reinsurance unit, National Indemnity, would gain access to Tokio Marine's global insurance portfolio.
The two companies also plan to pursue joint investments worldwide, including mergers and acquisitions, Tokio Marine added.
Tokio Marine said it would use proceeds of up to 287.4 billion yen (US$1.80 billion) from the share sale to buy back its own stock, aiming to prevent dilution for existing shareholders.
Following the initial share allocation to National Indemnity, any additional acquisition of Tokio Marine's shares is expected to be made primarily through the open market, the company said.
National Indemnity will agree not to buy more than 9.9 percent of Tokio Marine's outstanding shares without prior approval from Tokio Marine's board, according to the statement.
