Commentary: Is Berkshire Hathaway Moving Closer to Acquiring DaVita?

(BRK.A), (BRK.B)

Is DaVita Inc. (DVA) an acquisition target for Berkshire Hathaway? It is no secret that the Berkshire has long held a stake in the kidney dialysis provider.

Berkshire’s stake in DaVita goes back to 2012, when it began buying a million shares a month.

Why DaVita?

DaVita, which has over 200,000 daily dialysis clients in the U.S. and ten other countries, is the kind of predictable, steady business that Warren Buffett covets.

What is New?

Back in 2013, Berkshire Hathaway agreed to standstill agreement whereby it would not increase its stake in DaVita beyond 25%. However, in recent years its stake has crossed the 30% threshold, with Berkshire revealing on February 16, 2021, that it had boosted its position to a 33% stake.

Could Berkshire’s increased stake in DaVita be the prelude to an acquisition? That’s the question that both Berkshire and DaVita investors may start asking.

© 2021 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and BYD, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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