According to Reuters, Warren Buffett has built a $1 billion stake in Munich Re, boosting his insurance holdings by taking a 3 percent stake in the world's biggest reinsurer.
Munich Re said Buffett's shareholding rose just above the mandatory reporting threshold on January 18 and amounted to 3.045 percent of voting rights on that date.
Via Reuters:
Munich Re said Buffett's shareholding rose just above the mandatory reporting threshold on January 18 and amounted to 3.045 percent of voting rights on that date.
Via Reuters:
· Analysts said Buffett's stake was more likely financial than strategic because insurance companies, which buy protection for themselves from reinsurers, would shy away from giving too much business to allied reinsurance suppliers.
· Buffett is already a major player in the world's reinsurance market with his Berkshire Hathaway Inc unit, the world's third-biggest reinsurer.
· The billionaire investment icon also pumped 3 billion Swiss francs ($2.9 billion) into the world's No. 2 reinsurer, Swiss Re, at the height of the financial crisis after the Swiss group wrote down billions on illiquid assets.
· Munich Re's share turned positive on the news, rising by as much as 2 percent, before paring gains to ease 0.1 percent at 108.40 euros by 1028 GMT (5:28 a.m. EST). The DJ Stoxx index of European insurance shares fell 1.1 percent.
· The stake was worth around 740 million euros ($1 billion), according to a Reuters calculation.
· Data from Thomson Reuters StarMine, which weights analysts' forecasts according to their track record, shows Munich Re trading at 8.6 times 12-month forward earnings, a slight premium to Swiss Re's multiple of 8.1
