Berkshire Hathaway Inc. (BRKA, BRKB) agreed to acquire the 19.9% stake in Wesco Financial Corp. (WSC) it doesn't already own in a deal valued at about $547.6 million.
Berkshire, run by billionaire Warren Buffett, in September announced its intention to acquire the rest of Wesco, a Pasadena, Calif., holding company for insurers and other businesses that is run by Charlie Munger, Berkshire's vice chairman and Buffett's long-term business partner. At that time, the companies said the value of the deal would be determined by Wesco's book value around the time the deal closes.
Berkshire bought its majority stake in Wesco more than 30 years ago for a little over $30 million. Munger, 86 years old, previously said Wesco ought to be completely merged into Berkshire, but it was seen as difficult in the past because shareholders of Wesco had pushed its share price well above its book value.
Wesco shareholders can elect to receive cash or Berkshire Class B shares, with the value currently estimated at $386.55 a share plus an earnings consideration, which represents Wesco's per share shareholders equity at the end of last month. The final price and an exchange ratio for share transactions haven't been determined.
The transaction, expected to close before the end of the second quarter, requires approval by the majority of shareholders at a special meeting. The date hasn't been disclosed.
Wesco shares closed Friday at $380.67 and were inactive premarket. The stock is up 7.2% in the past year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com