Berkshire Hathaway Inc. (BRKa.N) Warren Buffett became the largest shareholder of Bank of America Corp. (BAC.N), realized its right to have 700 million shares in steep discounts, more than a triple investment made 6 years ago.
Berkshire is now the largest shareholder in the 2nd and 3rd largest banks in the United States, with a 6.6 percent stake in Bank of America and a 10 percent stake in Wells Fargo & Co. (WFC.N), according to Reuters.
He is also interested in JPMorgan Chase & Co (JPM.N), the largest US bank where one of Buffett’s deputies, Todd Combs is a director.
Bank of America said on Tuesday that Berkshire’s $ 7.14 purchase orders, which are significantly below its closing price of $ 23.58, which is 14 cents less than Monday. The announcement came after the closing of the US market.
Berkshire has replaced the preferred stock of $ 5 billion, which it bought in August 2011
Its new common stock is worth $ 16.5 billion, which makes Berkshire $ 11.5 billion in paper profits. Berkshire owns more than 90 companies such as Geico Motor Insurance, Ice Cream and BNSF Railways.
Buffett started Omaha, a Nebraska-based conglomerate since 1965. Billionaire is running for 87 years on Wednesday.
The swap was triggered by the decision of the Bank of America in June to increase its dividend by 60 percent after Charlotte, a North Carolina borrower, the “Federal Reserve” stress test its ability to move to the harsh markets.
He also trusts Buffett’s confidence in Bank of America chief executive Brian Moynihan, who accepted his money when the bank was halfway to clearing the balance and litigation related to the financial and housing crisis in the United States.
“In 2011, we received Berkshire Hathaway as a shareholder, and we appreciate its continued support as our largest shareholder,” Moynihan said Tuesday.
Berkshire will raise an annual dividend of $ 336 million from Bank of America, more than $ 300 million generated by the preferred share. It also receives about 800 million annual dividends from Wells Fargo.