(BRK.A), (BRK.B)
Warren Buffett had to look no further than his own Vice Chairman for his latest acquisition. In its just released quarterly report for Q2 2022, Berkshire Hathaway noted that in June it had acquired Vice Chairman Greg Abel’s 1% stake in Berkshire Hathaway Energy for $870 million.
The purchase was at a significant premium and Berkshire took a $362 million charge to capital.
With the acquisition, Berkshire now owns 92% of BHE, with the family of the late Berkshire board director Walter Scott owning the remaining 8%. It is considered likely that Berkshire will acquire that stake as well.
Greg Abel, who is currently overseeing Berkshire’s day-to-day operations, and will take over at some point for Warren Buffett as Chairman, has not commented on the transaction.
In 2000, Berkshire Hathaway made it first acquisition into the energy sector when it acquired MidAmerican Energy Holdings Company, later renamed Berkshire Hathaway Energy, for a value of approximately $9 billion. Other investors, who in total invested approximately $300 million, were Walter Scott, the former chairman of Peter Kiewit Sons’ Inc. and MidAmerican’s largest individual shareholder, and certain Scott family interests, and David L. Sokol, who at the time was the Chairman and Chief Executive Officer of MidAmerican. At the time, Greg Abel was MidAmerican’s president.
© 2022 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, 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.