US holding company Berkshire Hathaway has just disclosed to the public that it has purchased a new stake in the Ohio-based retail company Kroger. The announced made after the closing bell on Friday immediately resulted in a spike in the stock price of the US' largest supermarket by as much as 6 percent.
Warren Buffet's company revealed that it had purchased a total of 19 million Kroger shares during its fourth quarter. The acquisition officially ranks Berkshire Hathaway as one of the top 10 shareholders of Kroger's stock.
Berkshire Hathaway's investment in Kroger is particularly interesting and strange given that the holding company does own a small stake in Amazon, the online retail giant that has caused significant disruption in the US' grocery business.
Since Amazon entered the market, groceries and traditional retailers in the country have slowly seen their sales numbers decline, which begs the question of why Berkshire Hathaway had decided to purchase a stake in a major industry player. Amazon has also been involved in a series of acquisitions, including its recent purchase of Whole Foods, which has further caused concerns over its growing dominance.
However, to those familiar with Buffett's investment style, the acquisition of the stake may not come as such as a big surprise. The the billionaire investor has repeatedly mentioned in the past that he was very much a fan of the retail and food business.
In fact, Berkshire Hathaway is currently a major investor of a number of food and beverage companies such as Coca-Cola, Modelez, and Kraft Heinz. The holding company is also a parent company to a number of food industry players, including Dairy Queen, See's Candies, and Pampered Chef cookware.
Apart from disclosing its newly purchase shares of Kroger, Berkshire Hathaway also disclosed a number of other share acquisitions and sales. The company revealed that it has purchased a new stake in biotech firm Biogen during its fourth quarter. The news immediately sent Biogen's stock prices up by 2 percent after hours. Berkshire also revealed that it had added to its current stake in General Motors. The exact amount added to its GM stake and the amount of Biogen stocks it purchased was not disclosed.
Berkshire Hathaway disclosed that it has trimmed its current stake in a number of companies. This included a reduction of its large stake in Wells Fargo following the account fraud scandal involving the company's savings and checking accounts. The holding company also stated that it has reduced its shares in Goldman Sachs.
