The obscure business of reinsurance has always been one of Warren Buffett’s favorite money makers, but a changing landscape has led his Berkshire Hathaway Inc. to adjust its strategy. [...]
Berkshire is pivoting toward parts of the insurance industry it feels look more promising than reinsurance, putting the company in the unfamiliar role of upstart.
“What was a very lucrative business is no longer a very lucrative business going forward,” Ajit Jain, a longtime top lieutenant to Mr. Buffett and a potential candidate to succeed him as chief executive, said in an interview. Berkshire will pursue reinsurance deals when they make sense, he said. “But since the reinsurance business isn’t going to offer as many opportunities for the foreseeable future, we feel like we should go down the food chain.” [...]
The new focus is on commercial insurance through Berkshire Hathaway Specialty Insurance, and a new initiative called Berkshire Hathaway Direct, copying GEICO's strategy of using the internet to market insurance directly to small and midsized businesses.
Warren Buffett Will Celebrate July 4th With A New Stock: The Kraft Heinz Company (Forbes)
On Thursday, Heinz’s takeover of Kraft Foods closed. The new company will begin trading on the Nasdaq under ticker ‘KHC’ on Monday, July 6.
Ahead of the deal’s closing, Kraft Heinz announced that 3G executive Bernardo Hees will become CEO of the combined company, while Heinz CFO Paulo Basilio will assume the same role with the merged company. [...]
Kraft Heinz’s board will consist of eleven directors, including Berkshire’s Warren Buffett, Greg Abel and Tracy Britt Cool, and 3G Capital executives Jorge Paulo Lemann and Marcel Telles.
Buffett’s Kraft Heinz Bet Valued at $24 Billion in Debut (Bloomberg)
This makes Kraft Heinz BRK's second largest holding, after Wells Fargo ($26B).
Warren Buffett helped take over H.J. Heinz in 2013 and facilitated its combination with Kraft Foods Group Inc. this year. His prize: a stake of about $24 billion in the new company, which began trading Monday.
Kraft Heinz closed at $72.96 at 4 p.m. in New York trading. Buffett’s Berkshire Hathaway Inc. owns about 325 million shares, or roughly a quarter of the company, after investing approximately $9.5 billion over the transactions to acquire common stock.
Berkshire Hathaway’s MedPro Group to Acquire PLICO Insurance (BusinessWire)
PLICO, Inc. (PLICO), one of the Southwest’s premier healthcare liability insurers, the Oklahoma State Medical Association (OSMA), and Berkshire Hathaway’s MedPro Group (MedPro) today announced the signing of definitive agreements for the sale of PLICO to MedPro. The boards of each have approved OSMA’s sale to MedPro of 100% ownership of PLICO in an all-cash transaction, which is subject only to customary closing conditions and regulatory approvals and is expected to close in the third quarter. [...]
Based in Oklahoma City, PLICO serves approximately 2200 healthcare providers in Oklahoma; it has annualized gross written premiums of about $30 million and had statutory surplus of over $60 million at year-end 2014. PLICO’s principal operations will remain in Oklahoma City, where it was founded in 1979.
Berkshire Hathaway's Forest River fined for safety reporting violations (Omaha World Herald)
A manufacturer owned by Berkshire Hathaway Inc. has agreed to a civil penalty and stricter oversight for not reporting safety information properly, the U.S. Department of Transportation said Thursday.
Forest River Inc., based in Elkhart, Indiana, agreed to a $5 million cash penalty and an additional $30 million in “deferred” penalties that would be levied if it violates a 25-page safety enforcement agreement with the department.
The agreement cited reporting violations involving loose wiring on 726 camper trailers that could cause fires and a lack of fresh air exhaust vents in furnaces on 200 other campers that could cause fires or carbon monoxide exposure. The campers were manufactured last year.
Buffett Scores Cheapest Electricity Rate With Nevada Solar Farms (Bloomberg)
Warren Buffett’s Nevada utility has lined up what may be the cheapest electricity in the U.S., and it’s from a solar farm.International Dairy Queen Opens Newest International Location in the United Arab Emirates (BusinessWire)
Berkshire Hathaway Inc.’s NV Energy agreed to pay 3.87 cents a kilowatt-hour for power from a 100-megawatt project that First Solar Inc. is developing, according to a filing with regulators.
That’s a bargain. Last year the utility was paying 13.77 cents a kilowatt-hour for renewable energy. The rapid decline is a sign that solar energy is becoming a mainstream technology with fewer perceived risks. It’s also related to the 70 percent plunge in the price of panels since 2010, and the fact that the project will be built in Nevada, the third-sunniest state.
The Dairy Queen® system, part of Berkshire Hathaway, has officially re-launched in the United Arab Emirates (UAE) with the opening of a DQ Grill & Chill® restaurant. The UAE is now the 26th country outside the U.S. and Canada with a DQ® presence. [...] Bajco Gulf, LLC is scheduled to develop a minimum of 20 new locations across the territory over the next five years.
Warren Buffett makes $2.84bn donation to Gates Foundation and charities (The Guardian)
Warren Buffett has donated about $2.84bn of Berkshire Hathaway Inc stock to the Bill and Melinda Gates Foundation and four family charities, as part of the billionaire’s plan to give away nearly all of his wealth.
The 10th annual donation, Buffett’s largest, comprised 20.64m Class “B” shares of Berkshire and increased Buffett’s total contributions to the charities to more than $21.5bn.
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