Warren Buffett, Through His Berkshire Hathaway Company, To Become Major Goldman Sachs Shareholder By Swapping Warrants For Shares

 @MikeObelm.obel@ibtimes.com
on March 26 2013 12:20 PM
  • Buffett Warren
    Warren Buffett. Reuters
  • Billionaire Warren Buffett
    Billionaire financier and Berkshire Hathaway CEO Warren Buffett. Reuters
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Warren Buffett, through his Berkshire Hathaway Inc. (NYSE:BRK) investment vehicle, will become a major shareholder of Goldman Sachs Inc. (NYSE:GS), the New York-based investment bank disclosed Tuesday.

Berkshire Hathaway will swap warrants issued to it by Goldman Sachs in October 2008, at the worst of the financial crisis, for a 9 percent stake in Goldman Sachs, according to an SEC filing by the bank.

Buffett rescued Goldman, in exchange for the warrants, when it was reeling from the collapse of the U.S. housing market and the ensuing recession. Warrants are rights to purchase securities at a specific date and specific price.

Under the original terms, Berkshire had until Oct. 1, 2012, to make the warrants-for-shares swap.

"We are pleased that Berkshire Hathaway intends to remain a long-term investor in Goldman Sachs," Goldman Sachs CEO Lloyd Blankfein said.

 

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