OMAHA, Neb. (AP) — Warren Buffett's company is investing $500 million in Insurance Australia Group and taking on 20 percent of that company's new business.
Berkshire Hathaway Inc. will acquire 3.7 percent of the Australian firm as part of the deal announced Monday. Berkshire will also receive 20 percent of the revenue and pay 20 percent of the claims over the next decade.
The deal will strengthen Insurance Australia Group's balance sheet just as it expands its insurance operations in India and works to establish itself in Indonesia after a recent acquisition.
For Berkshire, the deal may help it find a new acquisition overseas and add to its already sizeable insurance float of $83.5 billion. Buffett invests that float money between when customers buy policies and when claims are filed.