(BRK.A), (BRK.B)
The days of MARS Bars as the candy of choice for Warren Buffett’s sweet tooth look to be over. While he’s still drinking Coca Cola, he won’t be munching on any more of Mars Inc.’s dividends.
Mars Inc. has announced it is acquiring Berkshire Hathaway’s minority stake that the company acquired in 2008 during the Great Recession. At the time, Buffett invested $2.1 billion for preferred stock and another $4.4 billion for corporate bonds to help finance Mars Inc.’s acquisition of the Wm. Wrigley Jr. Co.
Mars repurchased the bonds in 2013 at 115.45% of their face value, but the preferred stock has continued to pay 5% annual dividends to Berkshire.
Back in 2013, The Wall Street Journal estimated that Berkshire was on track to make as much as $680 million in profit from the deal.
© 2016 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 the 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.