Berkshire Hathaway's new move: $1.8 billion acquisition of a Japanese insurance giant

According to Shanghai Securities News, following Japan’s five major trading companies (Mitsubishi Corporation, Mitsui & Co., Marubeni Corporation, Sumitomo Corporation, and Itochu Corporation), Warren Buffett’s Berkshire Hathaway Inc. (hereinafter referred to as Berkshire) is planning to acquire a 2.49% stake in Japanese insurance giant Tokio Marine Holdings Inc. for $1.8 billion, further expanding its investment footprint in the Japanese market.

On March 23, Tokio Marine Holdings announced that the company would establish a comprehensive strategic partnership with Berkshire. As the basis for this strategic collaboration, Berkshire’s core reinsurance entity, National Indemnity, will acquire 2.49% of the issued and outstanding shares of Tokio Marine Holdings. The transaction amount is 287.41 billion yen (approximately $1.81 billion), and the initial shares will be allocated through the disposal of the treasury shares held by Tokio Marine Holdings.

To prevent the dilution of existing shareholders’ equity, Tokio Marine Holdings announced it would simultaneously repurchase up to 287.4 billion yen in company shares. Tokio Marine Holdings also stated that without prior approval from the company’s board of directors, Berkshire’s ownership stake in the company would not exceed 9.9%; if Berkshire continues to purchase the company’s stock in the future, it is likely to do so through the open market. In addition to National Indemnity’s strategic equity investment, the two companies will also engage in strategic cooperation in the fields of reinsurance and global investments, including mergers and acquisitions.

Berkshire’s strategy in the Japanese market primarily involves financing through yen-denominated bonds, implementing a “borrow yen to buy Japanese stocks” strategy. By issuing yen bonds, Berkshire not only avoids foreign exchange risk but also benefits from Japan’s low-interest financing environment. By the end of 2025, Berkshire raised approximately 210 billion yen through the issuance of yen-denominated bonds. At that time, this move was interpreted by the market as Berkshire possibly preparing “ammunition” for increasing its stakes in Japan’s five major trading companies. Since 2019, Berkshire has made a series of investments in Japan’s five major trading companies and currently holds about 10% of the shares in each of these companies.

Berkshire’s previously released 2025 financial report shows that in terms of Japanese investments, the amount borrowed by Berkshire in Japan is roughly equivalent to its yen investment amount, with an average borrowing cost of 1.2% and a weighted average maturity of approximately 5.75 years.