Berkshire Hathaway
Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska. Originally a textile manufacturer, it became a conglomerate from 1965 under the management of Warren Buffett, chairman and chief executive from 1970 to 2025, and the vice chairman Charlie Munger from 1978 to 2023. Greg Abel succeeded Buffett as chief executive at the beginning of 2026.
| Berkshire Hathaway Inc. | |
|---|---|
| Type | Public |
| Traded as | NYSE: BRK.A, BRK.B |
| Industry | Conglomerate |
| Founded | 1955 (textile merger); conglomerate from 1965 |
| Headquarters | Omaha, Nebraska, United States |
| Area served | Worldwide |
| Key people | Greg Abel (CEO), Warren Buffett (chairman and CEO 1970 to 2025) |
| Products | Insurance, rail freight, energy, manufacturing, retail |
| Subsidiaries | GEICO, BNSF Railway, Berkshire Hathaway Energy, See's Candies, National Indemnity, Nebraska Furniture Mart |
| Website | berkshirehathaway.com |
Buffett personally owns 38.4 per cent of the Class A voting shares, representing a 15.1 per cent overall economic interest.
The company is often compared to an investment fund. Between 1965, when Buffett gained control, and 2023, shareholder returns compounded at 19.8 per cent annually against 10.2 per cent for the S&P 500, with the share price falling in only eleven of those years. In August 2024 Berkshire became the eighth largest American public company and the first outside technology to be valued above one trillion dollars.
It ranks fifth on the Fortune 500 and ninth on the Fortune Global 500. Its Class A shares have the highest per-share price of any public company in the world, reaching 700,000 dollars in August 2024, because the board has historically opposed stock splits, a policy intended to discourage short-term trading in the stock.
History
Textile origins
Berkshire Hathaway was formed in 1955 from the merger of the Hathaway Manufacturing Company and Berkshire Fine Spinning Associates. Berkshire took its name from Berkshire County, Massachusetts, where it was based, and Hathaway from its founder Horatio Hathaway. After the merger the company had 15 plants, more than 12,000 workers and over 120 million dollars in revenue, headquartered in New Bedford. Seven of those plants were closed by the end of the 1950s with substantial redundancies.
Buffett takes control
In 1962 Warren Buffett began buying Berkshire Hathaway stock for his investment vehicle Buffett Partnership Ltd. at 7.50 dollars a share, expecting that as the company liquidated mills it would make tender offers at which he could sell at a profit. Within a year the partnership owned seven per cent of the company.
In 1964 Buffett agreed orally with the manager Seabury Stanton to sell his shares back at 11.50 dollars each. When the written tender offer arrived it was for 11.375 dollars. Buffett, by his own account angered by the undercutting, instead bought more stock at higher prices in order to take control and dismiss Stanton, who resigned with his son in 1965.
The result was that Buffett's fund held a controlling interest in a declining textile business. He has described the purchase as the greatest investment mistake of his career, estimating that it cost him compounded returns of roughly 200 billion dollars over the following 45 years, since the same money invested directly in insurance rather than through a failing textile company would have returned several hundredfold. The last textile operations closed in 1985.
Buffett established his office in Omaha in 1962, at what is now the company's headquarters at Blackstone Plaza, formerly Kiewit Plaza. At the end of 2024 the corporate headquarters employed only 27 people, a figure frequently cited as evidence of the company's extreme decentralisation. Franklin Otis Booth Jr. invested one million dollars in 1963 and David Gottesman invested in 1968; both eventually became billionaires.
Building the conglomerate
In March 1967 Berkshire acquired National Indemnity Company of Omaha for 8.6 million dollars, its first acquisition under Buffett and its entry into insurance. The logic became the foundation of the company: insurance premiums are collected before claims are paid, and the resulting float can be invested in the interim, providing capital at low or negative cost.
See's Candies was acquired in 1972 for 25 million dollars. A confectioner with highly seasonal revenue, roughly half of it earned in November and December, See's had returned more than two billion dollars by 2019. Buffett has described it as the purchase that taught him to pay a fair price for a high-quality business rather than a cheap price for a mediocre one, a shift in approach attributed to Munger's influence.
Berkshire first invested in GEICO in 1976 when the insurer was in financial difficulty and its stock was very low, eventually acquiring it outright.
It bought the Buffalo Evening News in 1977 and resumed the Sunday edition that had ceased in 1914. After the rival Buffalo Courier-Express closed in 1982 the paper became The Buffalo News. Berkshire later assembled a substantial newspaper group, forming BH Media Group with the purchase of the Omaha World-Herald in December 2011, buying 63 newspapers from Media General in June 2012 for 142 million dollars, and adding the Tulsa World, the Greensboro News and Record, the Roanoke Times and the Press of Atlantic City in 2013. Graham Holdings sold the Miami television station WPLG to BH Media in 2014.
The newspaper venture was eventually abandoned. Lee Enterprises took over management of the operations under a five-year agreement in June 2018 and acquired the BH Media publications and The Buffalo News in 2020 for 140 million dollars in cash, with Berkshire lending Lee 576 million dollars and retaining WPLG.
Nebraska Furniture Mart was acquired in 1983 for 60 million dollars. The Scott Fetzer Company, a group of 32 brands including Ginsu knives and World Book Encyclopedia, followed in 1986, as did Fechheimer Brothers, maker of public safety uniforms. National Indemnity acquired the workers' compensation insurer GUARD for 221 million dollars in 2012.
Later acquisitions built the modern group: BNSF Railway in 2010, the largest purchase in the company's history; Lubrizol in 2011; Precision Castparts in 2016; and the progressive assembly of Berkshire Hathaway Energy. The company also holds very large minority positions in listed companies, most notably Apple, Coca-Cola and American Express.
Succession
Greg Abel, previously vice chairman for non-insurance operations, was identified as Buffett's successor and became chief executive at the start of 2026, with Buffett remaining chairman. Munger, Buffett's partner for more than four decades and the intellectual influence behind the shift from buying cheap assets to buying good businesses, died in 2023.
Controversies
Salomon Brothers
In 1991 Berkshire's investment in Salomon Brothers led Buffett to take over as interim chairman after traders were found to have submitted false bids in United States Treasury auctions. His handling of the crisis, including full cooperation with regulators, is credited with saving the firm from prosecution, and his testimony to Congress, in which he told employees that losing money for the firm would be understood but losing a shred of reputation would be ruthless, is widely quoted.
Lubrizol and David Sokol
In 2011 David Sokol, then regarded as a possible successor to Buffett, resigned after it emerged that he had bought shares in Lubrizol shortly before recommending the company to Buffett as an acquisition. Berkshire's audit committee concluded that Sokol had misled the company. The U.S. Securities and Exchange Commission closed its inquiry without action. The affair prompted criticism of Berkshire's light internal controls, a consequence of the decentralised model in which subsidiary managers operate with minimal oversight.
Derivatives
Buffett described derivatives in 2002 as financial weapons of mass destruction, while Berkshire itself wrote large equity index put options with very long maturities. The positions produced substantial mark-to-market losses during the financial crisis before expiring profitably, and critics pointed to the apparent inconsistency between the warning and the practice.
Climate and insurance
Berkshire Hathaway Energy's continued operation of coal generation, and the group's insurance of fossil fuel projects, have drawn criticism from climate campaigners. Shareholder resolutions seeking disclosure of climate risk have been repeatedly opposed by the board and defeated by Buffett's voting control, with Buffett arguing that decisions are properly made by subsidiary managers rather than imposed centrally.
PacifiCorp wildfire liability
Berkshire Hathaway Energy's subsidiary PacifiCorp has faced very large liabilities arising from wildfires in Oregon and California, with juries awarding substantial damages and the company recording multibillion dollar charges. Buffett publicly identified utility wildfire risk as a reason to reconsider the attractiveness of the regulated utility business.
Governance and concentration
The dual-class share structure and Buffett's voting position have long attracted comment from governance specialists, as has the composition of a board containing several long-standing associates. The counter-argument, made by Berkshire and by many of its shareholders, is that the arrangement permitted a long-term approach unavailable to companies subject to quarterly pressure.
See also
References