The giant American conglomerate General Electric is selling $3bn (£1.7bn) of preferred shares to Warren Buffett's investment group Berkshire Hathaway, with another $12bn in common shares going to the public.
The company expects to price the offering before the market opens today. "GE is the symbol of American business to the world," said Mr Buffett. "I'm confident it will continue to be successful in the years to come." GE's stock has fallen by about 34 per cent this year as investors fretted about falling profits at its finance unit, GE Capital.
It is the second time in as many weeks that Berkshire Hathaway has moved to shore up a company long associated with ironclad financial health. Last week, Mr Buffett invested at least $5bn in Goldman Sachs, whose shares had tumbled on investor fears that the famed investment bank could face the same kinds of funding squeez-es as Bear Stearns and Lehman Brothers.
Mr Buffett is buying $3bn of General Electric's preferred shares. The perpetual preferred stock carries a dividend of 10 per cent, similar to the terms Mr Buffett struck with Goldman.
Jeff Immelt, GE's chief executive, said the sale enhanced GE's flexibility and gave the company "the opportunity to play offense in this market should conditions allow."Reuse content