(Bloomberg) -- Warren Buffett is expanding his wager on Italy.
The billionaire's Berkshire Hathaway Inc. said Thursday it agreed to buy about 9 percent of Italian insurer Societa Cattolica di Assicurazioni Scrl from Banca Popolare di Vicenza SpA, one of two failed banks in the northern region of Veneto.
A company controlled by Berkshire is buying the Cattolica shares at 7.35 euros each for a total of 115.9 million euros, according to a statement Thursday. The Verona, Italy-based insurer rose as much as 23 percent, the biggest advance on record, to 9 euros. It traded at 8.42 euros as of 1:46 p.m. in Milan, giving the company a market value of 1.46 billion euros ($1.7 billion).
The purchase follows the December acquisition by Berkshire unit Marmon Holdings Inc. of Modena, Italy-based Zephir SpA, a manufacturer of industrial tractors and vehicles that move train cars in rail yards. Earlier last year, Marmon announced it would buy Italian pasta-equipment maker Dominioni Punto & Pasta Srl and catering-equipment firm Angelo Po.
While Italy, Europe's third-largest economy, has been struggling with slow growth, Buffett has long said he's willing to endure sluggish periods at businesses with attractive long-term prospects. And there are signs the outlook is brightening. The economy is starting to pick up and the country's banking system has stabilized, fueling a boom in initial public offerings that's pushed new listings to the highest level in at least a decade.
The Italian government has said it expects the country's debt load to fall this year, and Finance Minister Pier Carlo Padoan said last month that the government foresees annual growth in gross domestic product of 1.5 percent this year, as well as in 2018 and 2019. The Treasury boosted its forecast from the 1.1 percent expansion for 2017 predicted in April.
Berkshire, based in Omaha, Nebraska, said Tuesday it bought a stake in Pilot Travel Centers LLC, owner of the Pilot Flying J truck stop chain, and detailed plans to become the Knoxville, Tennessee-based company's biggest shareholder in six years.
To contact the reporters on this story: Chiara Remondini in Milan at cremondini@bloomberg.net, Sonali Basak in New York at sbasak7@bloomberg.net.
To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson, Margaret Collins
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