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

Gregory Abel, the CEO of Berkshire Hathaway Vitality and who’s designated to succeed Warren Buffett as Berkshire CEO, walks by the group on the first in-person annual assembly since 2019 of Berkshire Hathaway Inc in Omaha, Nebraska, U.S. April 29, 2022. REUTERS/Scott Morgan

Aug 6 (Reuters) – Berkshire Hathaway Inc (BRKa.N) stated on Saturday that Vice Chairman Greg Abel, who’s subsequent in line to succeed billionaire Warren Buffett as chief govt, offered his 1% stake within the firm’s Berkshire Hathaway Vitality unit for $870 million.

In its quarterly report, Berkshire stated the vitality unit purchased out Abel in June beneath 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 Vitality, whose companies embrace 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 price $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,” stated Edward Jones & Co analyst James Shanahan.

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

Shanahan and Seifert cowl Berkshire.

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

Abel, 60, a hockey fan who grew up in Edmonton, Alberta, joined Berkshire Hathaway Vitality, then often called MidAmerican Vitality, in 1992, eight years earlier than Berkshire took it over.

He turned 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 stated 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. learn extra

Shanahan stated 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 sport.”

Reporting by Jonathan Stempel in New York; Further reporting by Maria Ponnezhath in Bengaluru; enhancing by Diane Craft

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