Berkshire Hathaway announced an $11.6 billion deal on Monday to acquire insurance company Alleghany.

The acquisition, which is expected to close at the end of the fourth quarter, would amount to $848.02 per share in cash. It represents the investment group's largest acquisition in six years, and CEO Warren Buffett’s first major deal in two years.

“The acquisition price represents a multiple of 1.26 times Alleghany’s book value at December 31, 2021, a 29% premium to Alleghany’s average stock price over the last 30 days and a 16% premium to Alleghany’s 52-week high closing price,” Berkshire noted in a press release.

The agreement requires approval from Alleghany stakeholders, as well as regulatory approval. Alleghany also has a shopping period of 25 days to seek out any other acquisition proposals. Once the deal closes, Alleghany would operate as an independent subsidiary of Berkshire Hathaway.

“This is a terrific transaction for Alleghany’s owners, businesses, customers and employees,” said Alleghany President and CEO Joseph Brandon.

“Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years. Throughout 85 years the Kirby family has created a business that has many similarities to Berkshire Hathaway,” Buffett said in the press release.

He also called Brandon a “friend” and said he was excited to work with him again. Buffett, 91, has a portfolio that makes him one of the richest men in the world with a net worth of $123.5 billion, eighth on Forbes’ billionaire's list.

As of 9:43 a.m. ET Monday, Berkshire Hathaway’s stock A option sat at $519,630, up $6,756, or 1.32%, and stock B was at $346.44, up $4.03, or 1.18%. Alleghany’s stock was at $847.00, up $170.25, or 25.16%.

Warren Buffett told CNBC that Greg Abel is in line to be Berkshire Hathway's next CEO
Warren Buffett told CNBC that Greg Abel is in line to be Berkshire Hathway's next CEO GETTY IMAGES NORTH AMERICA / Drew Angerer