TL/DR –
Warren Buffett’s Berkshire Hathaway has acquired a $1.6 billion stake in UnitedHealth Group, a US health insurer currently under a Department of Justice criminal investigation. This investment, revealed in a recent regulatory filing, caused UnitedHealth Group shares to rise by 8.1% in after-hours trading. It is worth noting that Berkshire Hathaway owned 1.18 million shares in UnitedHealth between 2006 and 2009 before selling the entire stake in 2010.
Warren Buffett’s Berkshire Hathaway Places $1.6 Billion Bet on UnitedHealth Group
Berkshire Hathaway, led by well-known investor Warren Buffett, has disclosed a $1.6 billion investment in the controversial US healthcare titan, UnitedHealth Group. Acquiring 5 million shares, Berkshire Hathaway now has a significant stake in UnitedHealth, despite the health insurer currently undergoing a criminal investigation by the Department of Justice.
This considerable investment was brought to light in a regulatory filing, causing shares in UnitedHealth to surge by 8.1% in after-hours Wall Street trading, reaching $293.38. Notably, between 2006 and 2009, Buffett held approximately 1.18 million shares in UnitedHealth, but sold his entire stake in 2010, distancing his business interests from health insurers.
Over the past year, UnitedHealth shares have seen a 53% decrease due to increased medical costs, federal probes, a cyberattack, and the aftermath of the tragic assassination of Brian Thompson, the CEO of UnitedHealthcare.
In response to media coverage about its involvement in the Medicare programme, UnitedHealth voluntarily approached the Department of Justice, as revealed in a July regulatory filing. Committed to cooperating with federal authorities, UnitedHealth aims to deal with the ongoing investigations transparently.
In May, Sir Andrew Witty resigned as CEO of UnitedHealth, leading to the suspension of the company’s annual forecast due to rising medical costs. Since then, Stephen Hemsley, the former CEO who became the chairman in 2017, has reassumed the role of CEO.
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