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Berkshire Hathaway purchases USD 3.45 billion stake in Exxon Mobil Corp

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(Credit: Reuters) This Reuters photo shows Warren Buffet, CEO of Berkshire Hathaway, leaving the first session of the annual Allen and Co. conference at the Sun Valley, Idaho Resort in July.Warren Buffet
November 14
7:34 PM 2013

Berkshire Hathaway Inc, the holding firm of billionaire Warren Buffet, said it had bought 40.1 million shares in Exxon Mobil Corp. The deal was worth USD 3.45 billion but represented less than 1% of the shares of the world's biggest publicly traded oil firm. A Reuters report said the stake acquisition showed that Buffet approved one of the biggest and most profitable oil firms in the world. After Berkshire disclosed the purchase, Exxon shares increased 0.7% in after-hours trading.

Oppenheimer & Co Senior Oil Analyst Fadel Gheit said about Buffet's investment, "He likes buying big, established global brand names, and Exxon is a good flight-to-quality stock." Gheit has given a "perform" rating for Exxon. He added that the stock is a typical holding of the billionaire. He told Reuters, "The stock has also lagged the market in the last three and five years. That makes it a typical Warren Buffett holding."

Exxon spokesman Alan Jeffers told Reuters, "We appreciate the confidence investors have in ExxonMobil when they decide to invest in the company."

A filing in the US Securities and Exchange Commission revealed the stake acquisition from Exxon. The filing also showed that Berkshire had equity investments of USD 92 billion as of September 30. It is a requirement for large investors to disclose their stock holdings on a quarterly basis. These filings offer a glimpse of their stock-buying and selling strategy. However, a Reuters report said Buffet would sometimes get permission from the US regulator to delay his disclosures. This allows him to purchase stock without letting other investors imitate his strategy. Reuters added that Buffet had delayed his filing for the second quarter this year, the time when the Exxon purchase happened.

Berkshire also has a stake in MidAmerican Energy which is set to buy NV Energy Inc, a utility firm in Nevada, for USD 5.6 billion.

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