Buffett's Berkshire Hathaway in talks to sell workers comp unit: sources
By David French (Reuters) - Warren Buffett's Berkshire Hathaway Inc is in advanced discussions to sell its Applied Underwriters workers compensation unit to a consortium of insurance firms, people familiar with the matter said on Friday. The deal would be a rare divestment by Buffett, who has built a corporate empire of more than 90 businesses in sectors spanning insurance, chemicals, energy, railroads, food and retail.
By David French
(Reuters) - Warren Buffett's Berkshire Hathaway Inc is in advanced discussions to sell its Applied Underwriters workers compensation unit to a consortium of insurance firms, people familiar with the matter said on Friday.
The deal would be a rare divestment by Buffett, who has built a corporate empire of more than 90 businesses in sectors spanning insurance, chemicals, energy, railroads, food and retail. Unlike private equity firms, the 88-year-old billionaire investor does not seek to cash out once he takes over a company.
However, San Francisco-based Applied Underwriters now sits outside Berkshire Hathaway's insurance focus, making it a non-core asset Buffett wishes to shed, the sources said.
Berkshire Hathaway's insurance businesses include the auto insurer Geico, reinsurer General Re, and a unit that protects against major catastrophes or unusual risks.
Applied Underwriters, on the other hand, provides bundled workers compensation and other employment-related insurance products targeted to small and medium-sized businesses.
A grouping of insurance firms and a hedge fund-backed reinsurance firm are in talks to buy Applied Underwriters at around the value of its book of business, the sources said, declining to disclose the price and the identity of the buyers.
The sources cautioned there is always a possibility that deal negotiations end unsuccessfully and asked not to be identified because the matter is confidential.
Berkshire Hathway did not immediately respond to a request for comment.
Applied Underwriters has also been in the crosshairs of California's insurance regulator, reaching a settlement agreement in June 2017 over "bait and switch marketing tactics", according to a statement from the state's insurance commissioner at the time. Berkshire Hathway acquired Applied Underwriters in May 2006.
Buffett is scheduled to publish his annual letter to Berkshire Hathaway shareholders this weekend, alongside the company's annual report. Berkshire Hathaway's cash pile reached $103.6 billion (79.3 billion pounds) as of the end of September, as Buffett has struggled to find attractive acquisition opportunities to put money to work.
Buffett's efforts to divest Applied Underwriters come as one of his biggest investments, Kraft Heinz Co, has soured. On Thursday, the food giant announced a multibillion-dollar writedown on its marquee brands, raising concerns that years of rigorous cost cuts had eroded the value of its Kraft and Oscar Mayer products.
(Reporting by David French in New York; Additional reporting by Jonathan Stempel in New York; Editing by Tom Brown)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.