Greg Abel at the annual Berkshire Hathaway meeting in Los Angeles, California. May 1, 2021
Gerard Miller | CNBC
Berkshire Hathaway said Saturday vice president Greg Abel, next in line to billionaire Warren Buffett as CEO, sold his 1% stake in the company’s Berkshire Hathaway Energy unit for $ 870 million.
In its quarterly report, Berkshire said the energy unit bought Abel in June based on an agreement between them and the family of the late billionaire philanthropist Walter Scott, who owns an 8% stake.
Buffett’s Omaha, Nebraska has invested $ 362 million in capital, reflecting a premium for how much the value of the shares is reflected in its books.
Berkshire currently owns a 92% stake in Berkshire Hathaway Energy, which operates in the energy, utilities and pipelines as well as major real estate brokerage in the US.
Scott, a native of Omaha, was a longtime Berkshire director and friend of Buffett, who died last September at the age of 90.
The sale of Abel suggests that the Scott family’s share may be worth $ 7 billion. Berkshire ended June with over $ 105 billion in cash.
“I suspect that if Abel sells, the Walter Scott estate could also be liquidated,” said Edward Jones & Co analyst James Shanahan.
CFRA Research analyst Cathy Seifert added: “It was a bit surprising that there was no prior regulatory proposal for such a significant transaction.”
Shanahan and Seifert look after Berkshire.
Scott’s family couldn’t get a comment right away. Berkshire Hathaway Energy did not immediately respond to a request for comment.
Hockey supporter Abel, 60, who grew up in Edmonton, Alberta, joined Berkshire Hathaway Energy, then known as MidAmerican Energy, in 1992, eight years before Berkshire acquired it.
He became head of MidAmerican in 2008 and vice president of Berkshire overseeing dozens of non-insurance activities in 2018.
Buffett turns 92 on August 30. In May 2021, he said that if he stepped down, Abel would become the CEO of Berkshire.
Abel and Ajit Jain, Berkshire’s vice president overseeing the insurance business, have received $ 19 million in each of the last three years. Buffett determines their compensation.
Shanahan said the sale of Abel “makes me wonder if he will buy Berkshire stock.”