Berkshire Sheds White Mountains Stake

Berkshire Hathaway has been an investor in White Mountains since 2001 and the Omaha, Neb.-based company currently owns 1.7 million White Mountains shares.

In addition to the cash, Berkshire will get Commercial Casualty Insurance Co. and International American Group. Those two companies had gross assets of about $435 million.

White Mountains CEO Ray Barrette said Berkshire's investment in White Mountains helped the company buy CGU/One Beacon in 2001. The purchase of CGU's property and casualty insurance business helped White Mountains expand beyond reinsurance.

"White Mountains is now a larger, more diversified business, competing actively in many areas with Berkshire Hathaway," Barrette said. "This is a graceful, value-enhancing way to go our separate ways."

Berkshire already owns several major insurance companies, including Geico and reinsurance giant General Re.

A Berkshire Hathaway spokeswoman said Monday that no company executive would be immediately available to comment.

The deal is expected to close in the third quarter of 2008. The terms of the deal value Berkshire's White Mountains stock at $836 million, or $485 per share, based on the closing price when the deal was agreed to.

Berkshire paid $369 million for the stock in White Mountains, which sells car insurance through its Esurance division and offers reinsurance through White Mountains Re.

Shares of White Mountains stock fell $17, or 3.6 percent, to $461 in morning trading Monday. Berkshire Hathaway's Class A shares slipped $805, or less than 1 percent, to $133,000.