Berkshire Hathaway recently acquired 10 million shares in General Motors

Article by Christian Andrei, on February 18, 2013

Berkshire Hathaway Inc. now has 25 million shares in General Motors after having recently acquired 10 million shares. This latest investment from Warren Buffett's company was revealed last Thursday in a Securities and Exchange Commission filing. This disclosure coincides with the announcement that the U.S. government is unloading a part of its share in the firm.

After the release of the company's fourth-quarter and 2012 financial results, its shares have dropped by 3.2%, or 92 cents, to $27.75 on Thursday in New York Stock Exchange trading. Today, the shares climbed 1 cent to $27.76. Based on the closing price last Thursday, Berkshire's GM shares are valued at about $694 million. This makes it one of the company’s biggest shareholders. Buffett is prominent in these circles as a patient value investor with a long-term view of equity markets.

Furthermore, Berkshire Hathaway is a partial owner of BYD Co., a Chinese automaker whose specialty is electric vehicles. In early 2012, Berkshire acquired 10 million shares of GM at an average price of $25.66. It bought an additional 5 million shares in the third quarter of 2012. When interviewed by The Detroit News in 2012, GM Chairman and CEO Dan Akerson, a former managing director at private equity firm Carlyle Group, described Buffett to be a "wise investor" with a proven track record.

Last December, the U.S. Treasury said that it will sell 200 million of its 500 million shares in GM for $5.5 billion. Around 19% of GM is still owned by the U.S. government, which rescued GM in 2008 and 2009. Last Thursday, the investment world was stunned when Buffett partnered with investor 3G Capital to acquire H.J. Heinz Co. in a deal worth $28 billion when debt assumption is included.

Topics: general motors

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