Insight

Berkshire CEO-designate Abel sells stake in energy company he led for $870 million

By Jonathan Stempel

(Reuters) – Berkshire Hathaway Inc mentioned on Saturday that Vice Chairman Greg Abel, who’s subsequent in line to succeed billionaire Warren Buffett as chief govt, bought his 1% stake within the firm’s Berkshire Hathaway Power unit for $870 million.

In its quarterly report, Berkshire mentioned the vitality unit purchased out Abel in June below an settlement amongst them and the household of the late billionaire philanthropist Walter Scott, which owns an 8% stake.

Buffett’s Omaha, Nebraska-based conglomerate took a $362 million cost to capital, reflecting the premium over how a lot the stake’s worth was mirrored on its books.

Berkshire now owns 92% of Berkshire Hathaway Power, whose companies embody vitality, utility and pipeline operations and a big U.S. actual property brokerage.

Scott, an Omaha native, was a longtime Berkshire director and Buffett pal who died final September at age 90.

Abel’s sale means that the Scott household’s stake could also be value $7 billion. Berkshire ended June with greater than $105 billion of money.

“I believe that if Abel is promoting, Walter Scott’s property may also liquidate,” mentioned Edward Jones & Co analyst James Shanahan.

CFRA Analysis analyst Cathy Seifert added: “It was a little bit stunning there wasn’t an earlier regulatory submitting for such a major transaction.”

Shanahan and Seifert cowl Berkshire.

Scott’s household couldn’t instantly be reached for remark. Berkshire Hathaway Power didn’t instantly reply to a request for remark.

Abel, 60, a hockey fan who grew up in Edmonton, Alberta, joined Berkshire Hathaway Power, then generally known as MidAmerican Power, in 1992, eight years earlier than Berkshire took it over.

He grew to become MidAmerican’s chief in 2008, and Berkshire’s vice chairman overseeing its dozens of non-insurance companies in 2018.

Buffett turns 92 on August 30. He mentioned in Might 2021 that if he stepped down, Abel would change into Berkshire’s chief govt.

Abel and Ajit Jain, a Berkshire vice chairman overseeing its insurance coverage companies, have been every paid $19 million in every of the final three years. Buffett units their compensation.

Shanahan mentioned Abel’s sale “makes me surprise if he’ll purchase Berkshire inventory. He would not personal very a lot, and may use proceeds to have extra pores and skin within the recreation.”

(Reporting by Jonathan Stempel in New York; Extra reporting by Maria Ponnezhath in Bengaluru; enhancing by Diane Craft)



Source link

Related Articles

Back to top button