Berkshire Hathaway's (NYSE: BRK-A, BRK-B) National Indemnity Company will acquire a 2.49% stake in Tokio Marine Holdings through a 287.4 billion yen ($1.8 billion) third-party allotment of treasury shares, the companies announced Monday.

The strategic partnership includes reinsurance collaboration and joint work on mergers and acquisitions. Tokio Marine plans to repurchase up to 287.4 billion yen of its own shares to offset dilution from the deal, using proceeds from the allotment to fund the buyback between April and September 2026.

Under the agreement, National Indemnity Company, Berkshire Hathaway's core reinsurance entity, may increase its stake up to 9.9% with prior approval from Tokio Marine's board.

Tokio Marine said it will leverage Berkshire's capital strength to mitigate underwriting volatility, particularly concerning natural catastrophe risks. National Indemnity will join Tokio Marine's reinsurance panel through a whole account quota share arrangement, providing the Berkshire unit access to a diversified global insurance portfolio.

"This strategic partnership represents a major step forward in advancing our insurance business and delivering sustainable value creation," said Tokio Marine Group CEO Masahiro Koike. "Through disciplined management, we remain fully committed to enhancing corporate value over the long term."

Ajit Jain, Berkshire Hathaway's vice chairman of insurance operations, cited the "exceptional management team" at Tokio Marine and noted compelling long-term opportunities for both organizations.