Warren Buffett's Berkshire Hathaway Inc will buy the 19.9 per cent it does not own of Wesco Financial, in a deal worth about $547.6m (£340m), the companies said.
Buffett first submitted a takeover bid for Wesco, run by Berkshire vice chairman Charlie Munger, last September. Berkshire acquired its 80.1 per cent stake in Wesco more than 30 years ago.
The cash-and-stock deal will give each Wesco shareholder the January 31 Wesco book value of $386.55 per share in either cash or Berkshire Class B common stock, plus considerations for monthly earnings and plus or minus the change in net unrealised appreciation of Wesco's investment securities.
Wesco shares closed at $380.67 on Friday.
The deal is expected to close before the end of the second quarter of 2011.
Greenhill & Co is acting as financial advisor and Skadden, Arps, Slate, Meagher & Flom is acting as legal advisor to the Special Committee.
Wesco is based in Pasadena, California, and its main businesses are insurance, furniture rental and steel.
Munger, 87, has been Wesco's chief executive since 1984, and Berkshire's vice chairman since 1978.
Buffett, 80, has run Berkshire since 1965. The Omaha, Nebraska-based company has a market value of about $200bn, operates about 80 businesses, and owns tens of billions of dollars of stock.