Berkshire Hathaway Inc. & Graham Holdings Exchanging Assets

Berkshire Hathaway Inc. & Graham Holdings Exchanging Assets
By Mark Hirschey (Work of Mark Hirschey) [CC BY-SA 2.0], via Wikimedia Commons

Warren Buffett is not slowing down. We have more evidence today that he continues to be an active deal maker, even in his mid-80s. Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) released a statement eariler today that it is planning an asset exchange with Graham Holdings Co (NYSE:GHC).

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The deal is not too surprising as Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) and Graham Holdings Co (NYSE:GHC) have been involved in business dealings for a number of years. Warren Buffett had a close friendship with former Washington Post publisher Katharine Graham and spent many years on the Post’s board.

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The Berkshire Hathaway and Graham Holdings deal

Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) is a longtime investor in Graham Holdings Co (NYSE:GHC), currently holding a 1.7 million share 28% stake in the company, according to FactSet. The shares are valued around  $1.23 billion, based on today’s opening stock price. Berkhsire announced in February that it was in advanced negotiations with Graham Holdings to exchange its stake in the company for other Graham assets.

The statement said Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) had agreed in principal to return to Graham Holdings 1.6 million Class B shares in exchange for Miami-based TV station WPLG, the Berkshire shares currently held by Graham Holdings and an undisclosed amount of cash.

Statements from Buffett and Graham

“I am sure this is a mutually beneficial transaction for both companies,” Berkshire Chief Executive Warren Buffett said in the statement. “While this transaction will greatly reduce our position in Graham Holdings, our admiration for the company and its management is undiminished.”

“Warren Buffett’s 40-year association with our company has been extremely good for our shareholders. Naturally, the deal that we have put together is one that will be good for both companies,” commented Donald E. Graham, chief executive of Graham Holdings.

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