Buffett’s Berkshire Hathaway buys into Australian insurer IAG for $380 mn

 Warren Buffett’s Berkshire Hathaway will pay $380 million for a stake in Sydney-based Insurance Australia Group (IAG) as it seeks to expand in Asia, the companies said on Tuesday.

Under a 10-year strategic relationship, Berkshire will receive 20 percent of IAG’s gross written premium and pay 20 percent of its claims. Berkshire will also take a 3.7 <g data-gr-id="16">per cent</g> stake in the group as the Australian firm pushes into Asia. The news sent shares in IAG soaring 5.03 <g data-gr-id="17">per cent</g> in afternoon trade to 5.85 Australian dollars.

“Our strategic partnership with IAG will help fast-track our entry into this region, and provides us with opportunities to leverage IAG’s extensive capabilities while also making our expertise available to IAG,” Buffett said in a statement.

IAG chairman Brian Schwartz said the company was delighted to welcome Berkshire Hathaway as a strategic partner and shareholder. “We believe the partnership is an endorsement of our strategy, the strong franchises we have created in the <g data-gr-id="20">Asia Pacific</g> region, and an acknowledgement of the complementary capabilities we can bring for our customers,” he said.