Warren Buffett’s Berkshire Hathaway has become the largest shareholder in Bank of America after exercising its right to buy 700 million shares.
The shares were acquired at $7.14 per share and are valued at around $16.5bn. Berkshire Hathaway paid for the shares by swapping $5bn of the bank’s preferred shares it acquired in August 2011.
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The deal gives Berkshire Hathaway an investment gain of $11.5bn. The 2011 investment was made when the bank was facing legal issues after a mortgage crisis.
Bank of America said that it already included the warrant exercise in its diluted earnings per share calculation.
Commenting on the move, Bank of America CEO Brian Moynihan said: “In 2011, we welcomed Berkshire Hathaway as a shareholder, and we appreciate their continued support now as our largest common shareholder.”
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