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Buffett holds option to boost Munich Re stake

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MUNICH—Warren Buffett’s investment in Munich Reinsurance Co. includes options that could push his stake in the German reinsurer to more than 5%.

Munich Re earlier this week revealed that Mr. Buffett, the billionaire investor who controls Berkshire Hathaway Inc., had increased his direct and indirect stake in Munich Re. In a statement released Thursday, Munich Re said Berkshire’s stake in the reinsurer is 3.084%, which is slightly higher than it previously announced. In addition, Munich Re revealed that Mr. Buffett holds financial instruments granting him the right to purchase another 1.945% in Munich Re and bring its ownership to 5.029%.

The exercise date on those options is March 11, according to Munich Re.

The options add to Berkshire Hathaway’s already significant investment in the reinsurance market. The Omaha, Neb.-based investment vehicle’s various reinsurance holdings, including General Re Corp. and National Indemnity Co., already rank it as the world’s third-largest reinsurer, according to the latest rankings by Business Insurance.

In addition, to its shares and options in Munich Re, the world’s largest reinsurer, Berkshire Hathaway holds a stake in Zurich-based Swiss Reinsurance Co., the second-largest reinsurer, and an option to increase its stake in the company to about 25%.