By ULRIKE DAUER
JANUARY 26, 2010, 12:22 P.M. ET
Munich Re AG, one of the world’s largest reinsurers, said it welcomed the 3% stake in the company held by billionaire investor Warren Buffett, chairman of investment company Berkshire Hathaway Inc.
Munich Re on Tuesday said Mr. Buffett’s stake had gone above the 3% threshold on Jan. 18 to stand at 3.045%.
A spokeswoman for the reinsurer declined to say if Mr. Buffett’s investment had increased gradually or abruptly since he first took a stake of less than 3% two years ago. The actual size of the holding was never disclosed. Neither Mr. Buffett nor Berkshire Hathaway was available to comment.
“We are pleased about every investor; that’s a confirmation of our sustainable strategy,” the Munich Re spokeswoman said.
In April 2008, Munich Re Chief Executive Nikolaus von Bomhard told shareholders that he expected Mr. Buffett to remain a long-term investor in the company.
A week before his comments, German daily newspaper Frankfurter Allgemeine Zeitung said Berkshire Hathaway had bought more than one million Munich Re shares, or a stake of at least 0.5%, then valued at about €125 million. Munich Re and Berkshire Hathaway declined to comment at the time.
Mr. Buffett’s Berkshire Hathaway also bought a 3% stake in Swiss Reinsurance Co. in early 2008. In 2009, Berkshire helped the Swiss reinsurer with a 3 billion Swiss franc loan after it ran into trouble because of the U.S. subprime-mortgage crisis, prompting it to strengthen its balance sheet.
The loan could eventually give Berkshire a 20% stake in the company should Swiss Re fail to pay it back within the next few years, a possibility that is deemed low by analysts.
Berkshire Hathaway itself has reinsurance operations, Berkshire Hathaway Re, which is among the largest three reinsurers world-wide by gross premium income.
Mr. Buffett has repeatedly said in the past that he isn’t looking at a takeover of the Swiss company. However, during the past two years, Swiss Re and Berkshire have entered several reinsurance deals, raising speculation that the two firms could merge at some point.
—Goran Mijuk in Zurich contributed to this article.
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