Berkshire Builds Symetra Stake by Retiring Warrants

Berkshire Hathaway Inc.’s General Re and a unit of White Mountains Insurance Group Ltd. will each get about $40 million of stock in life insurer Symetra Financial Corp. in a deal to retire warrants granted in 2004.

Symetra will issue about 2.65 million shares to each company, according to a regulatory filing today from the Bellevue, Washington-based life insurer. The deal is expected to be completed by June 28 and retires contracts that were set to expire next year.

Berkshire and White Mountains led an investor group in 2004 that purchased Safeco Corp.’s life-insurance business, which was renamed Symetra after the deal was completed. They remain the company’s largest investors and, prior to the deal announced today, had warrants to purchase 9.49 million common shares for $11.49 apiece. Symetra slipped 0.9 percent to $15.20 at 4:15 p.m. in New York after touching a record high on June 18.

“With the strength of the market, they may be looking to monetize some of that position,” Edward Shields, an analyst at Sandler O’Neill & Partners LP, said of the investors in a phone interview. He has a hold rating on Symetra.

Warren Buffett, Berkshire’s 82-year-old chairman and chief executive officer, has struck similar deals with New York-based Goldman Sachs Group Inc. and General Electric Co. in recent months. The arrangements allow Buffett to take shares in cashless transactions, while passing on opportunities to buy larger stakes at below-market prices.

The accord with Goldman Sachs stands to make Omaha, Nebraska-based Berkshire one of the bank’s largest shareholders when completed later this year.

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