Mon, Aug. 24, 7:47 PM
- Geico (BRK.A -3.2%, BRK.B -3.4%) will pay $6M to settle insurance discrimination charges first brought up by the Consumer Federation of California against the company.
- Geico was charged with quoting inflated rates to women, low-income and non-professional-level applicants. The company agrees not to consider education and occupation in sorting coverage limits via a three-year settlement.
- The payout could double to $12M if Geico's found to be not in substantial compliance.
Mon, Aug. 10, 11:28 AM
- Berkshire Hathaway's (BRK.A -0.7%; BRK.B -0.6%) $37B purchase of Precision Castparts (PCP +19.1%), combined with Berkshire's FQ2 earnings report that showed profit fell 37% due to higher costs at its insurance units, appear to be striking an off note with the company's investors, sending shares lower.
- It's the biggest deal of Warren Buffett's career: BRK is paying $235/share for PCP, a 21.2% premium over Friday's closing price and 18x projected profit over a 12-month period.
- "I'm not crazy about paying $30B for a $1.5B earnings stream of a cyclical company supplying airplane makers," says Jeff Matthews, a principal at hedge fund Ram Partners and author of a book about Buffett.
- Buffett tells CNBC that Berkshire will use $23B of its own cash and borrow ~$10B to fund the deal, which he says will be the last one his firm undertakes for roughly a year as it rebuilds its cash pile.
Wed, Jul. 1, 12:30 PM
- "This changes almost everything" in P&C, says KBW's Meyer Shields. "Ace (ACE +2%) is a very experienced and successful acquirer." The deal should help Ace better compete with rivals like AIG (AIG +1%) and Berkshire Hathaway (BRK.A, BRK.B).
- Merger presentation slides
- Unlike some other insurers focused on buybacks - including the acquired Chubb (CB +29%) - Ace and its CEO Hank Greenberg have been using capital for purchases, building scale and diversifying risk.
- Chubb CEO John Finnegan - previously set to retire at the end of 2016 - could be in for a nine-digit golden parachute should he be let go prior to that or resigns for reasons such as a reduction in responsibility or pay. Greenberg is set to lead the combined company.
- Previously: P&C stocks on the move after Chubb sale (July 1)
- Previously: ACE buying Chubb in cash and stock deal for $28.3B (July 1)
Aug. 4, 2014, 10:05 AM
- Cash residing in Berkshire Hathaway's (BRK.B +1.3%), (BRK.A +1.1%) coffers rose to $55.5B as of June 30, more than double the amount Warren Buffett has said he likes to keep on hand should the company's insurance units face unusually large claims.
- Berkshire's size is not just a hindrance to finding a needle-moving deal, but so is the perky stock market. Also, Berkshire isn't the only one out there looking for deals. "The amount of dry power is unprecedented," says a private-equity advisor, and the pile of money (estimated at $1.16T) has led to warnings from Blackstone's Tony James and Apollo Global's Josh Harris about paying too much for acquisitions.
- Previously: Berkshire Hathaway reports Q2 results
Mar. 4, 2014, 10:43 AM
- Utilities that meet takeover criteria outlined by Warren Buffett this weekend for another “major” acquisition after paying more than $5B last year for electricity provider NV Energy include Wisconsin Energy (WEC +1.8%) and Alliant Energy (LNT +1.1%), Bloomberg speculates.
- WEC and LNT operate in states with favorable regulatory environments, and LNT is expanding into renewable energy, which Buffett has signaled could be a focus for large investments, according to Morningstar; pipeline MLPs such as Plains All American (PAA) and MarkWest Energy (MWE) also could appeal to Buffett, a Baird analyst says.
- Berkshire Hathaway (BRK.A, BRK.B) “is likely looking at a lot of small, regulated utilities that have a lot of growth on the table where his low cost of capital is an incredible advantage,” Morningstar's Mark Barnett says.
Feb. 20, 2014, 10:44 AM
- Berkshire Hathaway's (BRK.A, BRK.B) BNSF Railway says it plans to buy its own fleet of up to 5,000 new crude oil tank cars with safety features that exceed the latest standards adopted by the industry more than two years ago.
- BNSF's plan, unusual for a railroad which generally owns only the tracks and locomotives that pull trains, is intended to further the industry's push for safer movement of crude by rail in light of several recent derailments and crashes, including one involving a BNSF train in North Dakota last December.
- BNSF isn't identifying railcar makers from which it will seek bids, but U.S. manufacturers include Trinity Industries (TRN +9.5%), American Railcar Industries (ARII +10.3%) and Greenbrier (GBX +5.4%).
Jan. 2, 2014, 8:34 AM
Dec. 31, 2013, 12:33 PM
- For Berkshire Hathaway (BRK.A, BRK.B), the purchase of Phillips 66's (PSX +2.9%) specialty products unit has a lot to do with the tax treatment; the financial terms of the deal look like the cash-rich spinoffs used by Liberty Media when it acquired interests in businesses such as the Atlanta Braves and DirecTV.
- The cash-rich split is a way for a holder of appreciated stock - PSX has gained 45% YTD - to dispose of it in a very tax efficient way, tax expert Robert Willens says, calling the acquisition a "great transaction" for Berkshire.
- But Barron's Ben Levisohn wonders what the purchase might say about PSX: BRK chose to pay with ~19M PSX shares it already owns and not with cash - is it a sign Warren Buffett thinks PSX has run too far?
Dec. 16, 2013, 9:09 AM
- Siemens (SI) +2.9% premarket after agreeing to sell 448 wind turbines and provide service for several years to MidAmerican Energy, Berkshire Hathaway's (BRK.A, BRK.B) power business, in SI’s biggest-ever order for land-based wind equipment.
- Wind turbines typically cost ~$1M for each MW of capacity, making the deal worth more than $1B, the head of Siemens Energy’s wind power division says, without providing an exact price.
- MidAmerican will equip five wind power projects in Iowa with the wind turbines and provide energy for nearly 320K homes.
Aug. 15, 2013, 2:32 PM
- Warren Buffett's (BRK.A, BRK.B) new ~$524M stake in Suncor (SU +3%) is a declaration of support for controversial Canadian oil sands and could be the start of something bigger, perhaps plays in other Canadian oil sands projects, 24/7's Jon Ogg speculates.
- The SU purchase will help ensure a steady supply of oil for Buffett's BNSF railroad to move; oil accounts for ~4% of BNSF's freight and is expected to double during the next several years.
- SU doesn't have the same transportation issues as some other oil sands producers, a Morningstar analyst says; it has locked up more than enough pipeline and rail capacity to move its current and planed production for several years.
May 29, 2013, 4:28 PMNV Energy (NVE) +22.4% AH after agreeing to be acquired by Berkshire Hathaway (BRK.A, BRK.B) subsidiary MidAmerican Energy for $23.75/share, a 23.2% premium to today's closing price. Upon completion of the deal, MidAmerican will have assets of ~$66B and its regulated electric and gas utilities will serve 8.4M customers. | May 29, 2013, 4:28 PM | 3 Comments
May 24, 2013, 5:42 PM
Feb. 14, 2013, 8:18 AM"We've bought a number of companies that have traded higher temporarily higher," Buffett tells CNBC after noting Heinz (HNZ) is currently trading at $72.90, a premium to the $72.50 price Berkshire (BRK.A) and 3G set with HNZ. "They're not going to get another penny out of me," the Oracle promises. | Feb. 14, 2013, 8:18 AM | 4 Comments
Feb. 14, 2013, 7:52 AM
Dec. 12, 2012, 10:57 AM
Dec. 12, 2012, 9:49 AMBerkshire Hathaway (BRK.B) raises the value at which it will repurchase shares to 120% of book value, from 110% previously. Coincident with that news is the purchase of 9.2K shares of Class A stock at $131K each from the estate of a long-term shareholder. 120% of book is approximately the $87-$90 range for the "B" shares, which are +1.6% to $88.68. | Dec. 12, 2012, 9:49 AM | 12 Comments
BRK.A vs. ETF Alternatives
Berkshire Hathaway Inc is a conglomerate holding company owning subsidiaries engaged in a number of business activities, including property and casualty insurance and reinsurance, utilities and energy, finance, manufacturing, service and retailing.
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