Buffett Buys Reinsurer; Bond Venture Rumored

The Oracle of Omaha is picking up a Dutch reinsurance business on the cheap.

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Dutch financial services firm ING on Friday announced the sale of its NRG reinsurance unit to billionaire investor Warren Buffet's Berkshire Hathaway for 300 million euros ($440.7 million), resulting in a capital loss after tax of 100 million euros ($146.9 million) in 2007.

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The acquisition could have something to do with plans by Buffett to launch a municipal bond insurance company. The Wall Street Journal reported that Buffett will launch a bond insurance business Friday in New York, aiming to capitalize on instability in that sector.

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If true, it could spell trouble for the leading bond insurers Ambac Financial Group and MBIA.