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Stocks B / Berkshire Hathaway


Subject:  Re: Berkshire buys Heinz Date:  2/14/2013  10:10 AM
Author:  bigshan Number:  198562 of 235694

<<Berkshire and and 3G will each put up $4.4 billion in equity for the deal, along with debt financing from JPMorgan Chase and Wells Fargo. Berkshire is also buying $8 billion of preferred stock that pays 9 percent.

Good parts:
1. 9% perferred;
2. borrowing money at 3-4% to partially pay for the deal that earns 5% and increasing anually. The dividend would take care of the interest. So it's like BRK pays $4.4b for part of the company, plus another significant part that's financed by other people's money for free.
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