boosts Berkshire's Wells Fargo stake to 10 percent
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[March 29, 2016]
By Jonathan Stempel
(Reuters) - Warren Buffett's Berkshire
Hathaway Inc on Monday said it has increased its ownership stake in
Wells Fargo & Co to 10 percent, a level that could mean increased
federal scrutiny over the investment.
Berkshire owns 506.3 million shares of Wells Fargo, worth about
$24.7 billion, mainly through subsidiaries, according to filings
with the U.S. Securities and Exchange Commission.
The ownership stake has risen from 6.5 percent at the end of 2009
and 9.8 percent as of Dec. 31, according to Buffett.
Berkshire has paid close to $13 billion for its Wells Fargo shares,
based on Buffett's shareholder letters and the bank's recent stock
Wells Fargo is based in San Francisco, and is the third-largest U.S.
bank by assets.
"We value Berkshire Hathaway as a long-term shareholder and customer
and appreciate the confidence that Berkshire's executive team has
shown in Wells Fargo," a spokesman said.
The Federal Reserve exerts special oversight when investors take
large stakes in banks.
In a September 2008 policy statement, the Fed said it often lets
investors take double-digit bank stakes not designed to exert a
"controlling influence," but would review any resulting business
The U.S. Treasury Department, meanwhile, has said it will not deem a
10 percent stake to result in "control" of a big bank if the
investor agrees in writing to limits on its involvement.
In one of Monday's filings, Buffett certified that Berkshire's Wells
Fargo shares "were not acquired and are not held" with the intent of
changing how the bank operates.
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Speaking on CNBC television on Feb. 29, Buffett called Wells Fargo
"a terrific operation" and said Chief Executive John Stumpf has done
a "fabulous job."
As of Dec. 31, Omaha, Nebraska-based Berkshire also owned a 15.6
percent stake in American Express Co, having crossed the 10 percent
threshold two decades earlier.
Berkshire also operates close to 90 businesses including the Geico
insurer, the BNSF railroad, various utilities and Dairy Queen ice
Wells Fargo shares closed down 20 cents at $48.70 in Monday trading
on the New York Stock Exchange.
(Reporting by Jonathan Stempel in New York; Editing by Tom Brown and
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