Warren Buffett’s Berkshire Hathaway Inc. will get $1.8 billion in investment assets as part of a deal to assume liabilities from Cigna Corp.
Cigna will also fund the deal with $100 million in cash, according to a statement Monday from the Bloomfield, Connecticut-based insurer. Omaha, Nebraska-based Berkshire will cover as much as $4 billion of Cigna’s liabilities tied to claims on retirement products with guaranteed benefits.
Buffett, who oversees the largest U.S. reinsurer, has struck deals to assume obligations from insurers that are seeking to cut risk or narrow their focus. The contracts give the billionaire more funds to invest.
“Cigna is taking this definitive strategic step to further reduce risk and continue to improve our financial flexibility,” said David M. Cordani, chief executive officer of the insurer.
Cigna said it will take a $500 million after-tax charge in the first quarter tied to the transaction.
© Copyright 2014 Bloomberg News. All rights reserved.