By Eric Rosenbaum 02/12/10 – 10:14 AM EST
OMAHA, Neb. (TheStreet) — Warren Buffett and Berkshire Hathaway(BRK.B Quote) are now the biggest shareholders in Munich Re, eclipsing the previously biggest stake in the reinsurance company held by money manager BlackRock(BLK Quote).
Last month, Berkshire Hathaway revealed that it had built a 3% stake in Munich Re.
Buffett isn’t done yet, either, in building up his stake in Munich Re. A regulatory filing indicates that Berkshire Hathaway has options on another 2% of Munich Re that can be exercised by March 11, taking Berkshire’s holding in the reinsurer to 7%.
Munich Re management said they do not view the big recent moves from Buffett into their stock as a hostile maneuver.
Buffett already owns 3% of Swiss Re, and Berkshire Hathaway has a long-time strategy of using the spread between the cost of insurance premiums and the return on equity from reinvestment of premium income to generate profits for Berkshire investors.
Berkshire also announced in January that it had acquired for, $1.3 billion, a block of reinsurance premiums from Swiss Re in the range of $50 billion to $60 billion.
While Munich Re does not view the move as hostile — and street analysts have concurred with this view — Berkshire also began its investment in Burlington Northern(BNI Quote) with a an 11% stake in April 2007, and is in now in the final stages of acquiring the railroad operator.
Longtime Berkshire investors have also been wondering whether the Burlington deal with be the last major M&A move of Buffett’s career, or if the Oracle of Omaha has another big surprise in store for shareholders in the coming years.
— Reported by Eric Rosenbaum in New York.
Share Investor Blog – Stockmarket & Business commentary
Share Investor New Zealand Business News– Get more business news
Discuss this topic @ Share Investor Forum – Register free
Share Investor’s Daily Forex Updates
Recommended Amazon Reading
 |
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham Buy new: $14.95 / Used from: $11.44 Usually ships in 24 hours |
 |
The Warren Buffett Way, Second Edition by Robert G. Hagstrom Buy new: $9.72 / Used from: $4.67 Usually ships in 24 hours |
