Warren Buffett’s Berkshire Hathaway Inc plans to pay A$500 million (US$387 million) for a stake in Sydney-based Insurance Australia Group Ltd (IAG) as it seeks to expand in Asia, the companies said yesterday.
Under a 10-year strategic relationship, Berkshire is to receive 20 percent of IAG’s gross written premium and pay 20 percent of its claims. Berkshire is also to take a 3.7 percent stake in the group as the firm pushes into Asia.
The news sent shares in IAG soaring by 5.03 percent in Sydney afternoon trading yesterday to A$5.85.
Photo: Reuters
“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 Asia-Pacific region, and an acknowledgment of the complementary capabilities we can bring for our customers,” he said.
IAG and Berkshire Hathaway have had a reinsurance relationship since 2000; Buffett said he expected the partnership to be long-lasting.
“Even though this contract runs for 10 years, I expect for decades and decades and decades to come that both companies will benefit in many ways that we cannot even, perhaps, visualize now,” Buffett said in a video message.
IAG has joint ventures and stakes in insurers across Asia, including in Vietnam, India, Malaysia and China.
Under the deal, which is expected to free up as much as A$700 million in capital for IAG over the next five years, the Australian company has the option to place a further 5 percent with Berkshire within 24 months.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)