Berkshire Hathaway to invest $5bn in Goldman Sachs

by Richard Kilner

Story link: Berkshire Hathaway to invest $5bn in Goldman Sachs

The Goldman Sachs Group has reached an agreement with Berkshire Hathaway whereby Hathaway will purchase $5bn of perpetual preferred stock via a private offering.

The stock will be callable at any time with a 10% premium, and yield a 10% dividend.

Berkshire Hathaway is also, as part of the agreement, to receive warrants to purchase $5bn of common stock, with a strike price of $115 (per share).

This will last for a period of five years, during which it can be exercised at any time.

Simultaneously, Goldman Sachs is to generate common equity of $2.5bn through a public offering.

Lloyd C. Blankfein, chairman and chief executive officer of the Group, has welcomed the agreement, and praised Warren Buffett as arguably the most admired investor in the world today.

Buffett, who is CEO and chairman of Berkshire Hathaway, has described Goldman as an exceptional institution equipped with an unrivalled global franchise.