Warren Buffett Goes Long on Goldman Sachs

by Christopher Freeburn | March 26, 2013 11:58 am

Sage of Omaha[1]Berkshire Hathaway (NYSE:BRK.A[2], BRK.B[3]) has changed its investment deal[4] with Goldman Sachs (NYSE:GS[5]).

The firm run by iconic billionaire Warren Buffett provided the investment bank with a $5 billion infusion during the financial crisis in 2008 in exchange for preferred shares and the option to acquire 43.5 million common shares of Goldman Sachs for $115 a share through October of this year. Under terms of the new agreement, Goldman Sachs will give Berkshire more shares to cover the difference between the option price and the actual price of its shares, USA TODAY notes.

Buffett said that Berkshire plans to “hold a significant investment in Goldman Sachs.” Under the new deal, Berkshire is likely to become one of the investment banks 10 largest stakeholders.

Goldman Sachs paid Berkshire $5.65 billion in 2011 to recover the preferred shares provided in the earlier deal.

In February, Berkshire partnered with Brazilian private equity firm 3G Capital to launch a $23 billion takeover bid[6] for ketchup-maker Heinz (NYSE:HNZ[7]).

Shares of Goldman Sachs slipped slightly in Tuesday morning trading.

  1. [Image]: https://investorplace.com/wp-content/uploads/2011/08/Warren_Buffett_Smile_630.jpg
  2. BRK.A: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.A
  3. BRK.B: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.B
  4. has changed its investment deal: http://www.usatoday.com/story/money/business/2013/03/26/goldman-sachs-berkshire-hathaway-shares/2020489/
  5. GS: http://studio-5.financialcontent.com/investplace/quote?Symbol=GS
  6. to launch a $23 billion takeover bid: https://investorplace.com/2013/02/berkshire-hathaway-partners-for-23b-heinz-purchase/
  7. HNZ: http://studio-5.financialcontent.com/investplace/quote?Symbol=HNZ

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