Bermuda-based White Mountains Insurance Group Ltd. announcedtoday that Berkshire Hathaway has agreed to a sale of its 16.3percent stake in White Mountains for cash and stock valued at $836million.

A.M. Best said there would be no ratings change for WhiteMountains as a result.

Under the terms of the agreement, Berkshire Hathaway wouldexchange all or substantially all of its 1,724,200 common sharesfor 100 percent of a White Mountains subsidiary, which will holdCommercial Casualty Insurance Company, International American GroupInc. and $751 million in cash, subject to adjustment.

As of Dec. 31, 2007, CCIC and IAG had combined gross assets ofapproximately $435 million and adjusted shareholder's equity of $58million.

Following the consummation of the transaction, expected duringthe third quarter of 2008, the outstanding common shares of WhiteMountains would be reduced to approximately 8.8 million shares, thecompany said.

Ray Barrette, chief executive officer of White Mountains, saidthe agreement would allow his company "to exit runoff businesseswith potentially volatile reserves, to significantly reduceundeployed capital, and to redeem one-sixth of the company's sharesat a small premium to GAAP book value."

The transaction, according to Mr. Barrette, will create"substantial value for White Mountains and our remainingshareholders."

He said Berkshire Hathaway's chairman and chief executiveofficer, Warren Buffett and his company were "key to the financingof our acquisition of CGU/OneBeacon in 2001, and all shareholdersbenefited handsomely from the relationship."

White Mountains noted that although Berkshire Hathaway has beenan important investor in White Mountains since 2001, it has neverhad representation on the board of directors.

"White Mountains is now a larger, more diversified business,competing actively in many areas with Berkshire Hathaway. This is agraceful, value-enhancing way to go our separate ways," said Mr.Barrette.

White Mountains said neither it nor Berkshire Hathaway expectsto realize a taxable gain as a result of the exchange. The numberof White Mountains common shares to be exchanged and the amount ofcash to be included are subject to tax-related adjustment.

The transaction has been unanimously approved by the board ofdirectors of White Mountains.

White Mountains' insurance subsidiaries include:

o White Mountains Re Group Ltd., a global reinsuranceoutfit.

o Esurance, with personal auto insurance marketed andunderwritten on the Internet.

o Folksamerica Reinsurance Company.

o Folksamerica Re Solutions Ltd., specializing in acquiringrunoff insurance and reinsurance companies.

o Sirius International Insurance Corp., offering property andother short-tailed lines of reinsurance.

White Mountains has ownership interests in OneBeacon InsuranceGroup (a specialty and segmented personal and commercial andcasualty primary insurer) and Symetra Financial Corp. (a providerof group insurance, retirement services, individual life, andincome annuities).