Buffett’s Berkshire acquires Kroger and Biogen, reduces Wells Fargo and Goldman stakes

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(Reuters) - Warren Buffett’s Berkshire Hathaway Inc. said Friday it had acquired a $ 549.1 million stake in Kroger Co, investing in the largest US supermarket chain while its smaller rivals are struggling.

FILE PHOTO - Berkshire Hathaway President Warren Buffett walks through the showroom as shareholders gather to hear the billionaire investor at the annual shareholder meeting of Berkshire Hathaway Inc in Omaha, Nebraska, United States United, May 4, 2019. REUTERS / Scott Morgan

In a regulatory brief detailing its investments listed in the United States as of December 31, Berkshire also said it had taken a new stake of 648,000 shares in the drug maker Biogen Inc worth $ 192.4 million, and reduced considerably its stakes in two large banks, Wells Fargo & Co and Goldman Sachs Group Inc.

Berkshire has sold more than 86 million shares, or 21%, of its stake in Wells Fargo since June 30, as the bank attempts to restore its reputation following scandals over its mistreatment of its customers.

Since the scandals broke out in September 2016, the Standard & Poor’s 500 has risen 55%, while Wells Fargo is down 3%. Berkshire started investing in Wells Fargo in 1989.

Kroger's shares rose 3.9% and Biogen rose 1.5% in after-hours trading, a sign of investor consideration for Buffett and the conglomerate of Omaha, Nebraska, which he conductor since 1965.

Investors are monitoring Berkshire's quarterly deposits to see where the value of Buffett and his portfolio managers Ted Weschler and Todd Combs, who is also chief executive officer of auto insurer Berico de Geico.

Friday's record does not say who bought or sold particular stocks, although Buffett normally leads large investments such as Wells Fargo and Apple Inc, the largest in Berkshire.

Buffett's assistant, along with Kroger and Biogen, did not immediately respond to requests for comment.

Kroger, in which Berkshire has disclosed an $ 18.94 million stake, has invested heavily to expand online, modernize stores and improve deliveries to compete with Walmart Inc and Amazon.com Inc, the latter also being a Berkshire holding company.

Many smaller chains have done worse, and Earth Fare, Fairway and Lucky’s have filed for bankruptcy protection this year. Kroger had invested in Lucky’s.

Berkshire's stake in Wells Fargo fell 15% during the quarter to 323.2 million shares valued at $ 17.4 billion, ahead of its stakes in Bank of America Corp and American Express Co.

Goldman’s ownership fell by 35% to 12 million shares worth $ 2.8 billion. This interest stems from Buffett’s lucrative foray into Goldman’s preferred shares during the 2008 financial crisis.

Berkshire also has more than 90 business units, including Geico, the BNSF Railway, Dairy Queen ice cream and namesake energy, real estate brokerage and car dealerships.

Friday's record suggests that the purchase of Berkshire shares has not significantly reduced its treasury by $ 128.2 billion since September 30.

Berkshire is expected to discuss its assets further on February 22, when it publishes its annual report and Buffett's annual letter to shareholders.

Jonathan Stempel reports in New York; Editing by Chris Reese, Dan Grebler and Tom Brown

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