THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Saturday, August 26, 1995              TAG: 9508260362
SECTION: BUSINESS                 PAGE: D1   EDITION: FINAL 
SOURCE: STAFF AND WIRE REPORT 
DATELINE: NEW YORK                           LENGTH: Short :   50 lines

BERKSHIRE HATHAWAY TO BUY GEICO THE CONGLOMERATE WILL PAY $2.3 BILLION FOR THE 49 PERCENT OF THE COMPANY THAT IT DOESN'T ALREADY OWN.

Multibillionaire Warren Buffett's investment conglomerate, Berkshire Hathaway Inc., will spend $2.3 billion to acquire Geico Corp., among the largest insurers in Hampton Roads and the nation.

The companies said today that Omaha-based Berkshire, which already owns 51 percent of Geico, will pay $70 a share in cash for the rest.

That is a 25 percent premium over Geico's closing price on Thursday of $55.75 a share in trading on the New York Stock Exchange.

Geico shot up $17.87 1/2 a share Friday to close at $68.62 1/2 a share on the New York Stock Exchange. Berkshire Hathaway gained $450 to close at $25,250 a share.

Geico is considered the fifth largest automobile insurer in Virginia with $197 million worth of coverage in force, said the insurance research firm A.M. Best.

Buffett, the folksy Omaha investor who parlayed his savvy into one of the world's biggest personal fortunes, said he's always liked Geico, parent of Government Employees Insurance Co.

``What they do extremely well is deliver low-cost auto insurance,'' Buffett said.

One of the nation's largest auto insurers, Geico concentrates primarily on preferred risk customers - people with long and good driving records who pay lower premiums.

The company has recently expanded into the so-called substandard and standard lines of auto insurance - policies for younger and medium-risk drivers.

Geico serves more than 2.5 million policyholders, many of them government and military employees. The company has 8,000 employees and regional offices in Georgia, New York, Virginia, California and Texas.

Olza M. Nicely and Louis A. Simpson, who will continue as co-presidents and co-chief executives of Geico, said the merger with Berkshire Hathaway ``will enable Geico to become even more efficient.''

In addition to its holding in Geico, Berkshire Hathaway owns stakes in several insurers and a diverse group of other companies including The Washington Post Co., Capital Cities/ABC Inc., Coca-Cola Co., Wells Fargo Co. and USAir. by CNB