WASHINGTON – Warren Buffett’s company says it has agreed to acquire a Miami-based TV station from Graham Holdings Co. in exchange for most of its shares in the company that once owned The Washington Post.
The deal will nearly eliminate Berkshire’s investment with the Graham family, which dates back to 1973 when Buffett invested $10.6 million in the Washington Post Co. after the newspaper’s stock took a beating following the publication of its famed Watergate stories.
“While this transaction will greatly reduce our position in Graham Holdings, our admiration for the company and its management is undiminished,” said Buffett, who was a close friend with former Washington Post publisher Katherine Graham and advised the family on business matters. The company changed its name to Graham Holdings Co. last year after selling the newspaper.
Both Berkshire and Graham will receive assets worth roughly $1.1 billion in the deal, according to documents filed with the Securities and Exchange Commission Wednesday.
Under the agreement, Berkshire Hathaway Inc. gets TV station WPLG worth an estimated $364 million along with some Berkshire shares currently held by Graham and cash.
Graham gets 1.6 million of the 1.7 million shares of Graham Holdings Class B common stock Berkshire currently owns. Berkshire’s Graham stake was worth more than $1.2 billion.
Besides WPLG, Graham owns Kaplan Education, five other television stations, the online magazine Slate and several other ventures.
The exact number of shares of each company and the amount of cash will be determined when the deal closes.
Buying a television station could add a new wrinkle to Berkshire’s growing media chain. Berkshire now owns 31 small- and medium-sized daily newspapers. It has bought most of those newspapers since 2011 at bargain prices. Including weekly papers and other publications, Berkshire owns 70 newspapers.
Berkshire has some experience in television because in the 1980s it helped finance Capital Cities’ purchase of ABC. Buffett served on the Washington Post and Capital Cities boards for decades while they owned television stations.
But newspapers and WPLG will represent a relatively small part of Berkshire Hathaway, which owns more than 80 subsidiaries and holds major stakes in companies like Coca-Cola Co., Wells Fargo and IBM. Berkshire’s subsidiaries include Geico and General Reinsurance, BNSF railroad, MidAmerican Energy utility, Fruit of the Loom, Nebraska Furniture Mart and Dairy Queen.