BRK bought GE during the last downturn.
From a Motley Fool article:
Quote:
Like Goldman Sachs, General Electric found itself vulnerable when the market melted down six years ago. In the run-up to the financial crisis, General Electric had seen huge growth in its finance division. That left General Electric dangerously exposed to the credit crunch that hit the financial markets in late 2008.
As part of a broader capital-raising strategy that included a $12 billion offering of common stock to investors, General Electric turned to Berkshire Hathaway in October 2008, giving Buffett the chance to invest $3 billion in General Electric in return for preferred stock and warrants on GE. As with Goldman, General Electric paid Berkshire a 10% dividend on the preferred shares, and Berkshire got the right to buy $3 billion in GE stock for $22.25 per share at any time over the ensuing five years.
The deal gave investors confidence in General Electric's plan to reduce its financial exposure, a strategy that has worked out well in the years since the crisis. GE's recovery took longer than Goldman's to pan out, but in the end, General Electric repaid the $3 billion plus a 10% premium for the preferred shares in 2011, and Berkshire ended up taking $260 million in General Electric shares last year in lieu of exercising its warrants.
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