Berkshire Hathaway divests stake in Exxon Mobil for $3.74bn

EBR Staff Writer Published 18 February 2015

Warren Buffett's Berkshire Hathaway has divested its stake in Exxon Mobil for $3.74bn, amid falling oil prices.

Citing a US Securities and Exchange Commission filing, Reuters reported that the company bought a new 24.7 million share stake in Deere & Co. (DE), an agricultural equipment manufacturer. Besides, several other changes were included in its common stock investments.

The 41 million-share stake in Exxon Mobil was acquired by Berkshire in 2013, when the oil price was at its peak.

Raymond James energy analyst Pavel Molchanov told Reuters in an interview that Buffett "is of course a value investor, and the fact of the matter is that Exxon shares held up extremely well during the oil price meltdown."

In the last three months of 2014, Berkshire also sold 471,994 shares in oil company ConocoPhillips. However, the investment firm, led by Warren Buffett, has not completely exited the oil sector - as of 31 December 2014, the company retained interests in Suncor Energy, National Oilwell Varco and Precision Castparts, reported The Telegraph.

With oil price plunging, several investors have been shedding their assets. From a peak of more than $115 per barrel in June 2014, the oil price shrunk to less than $50 a barrel in January 2015. On Tuesday, the Brent traded at $62.53.

The plunging oil price has taken a toll on oil companies such as Shell, which terminated the proposed $6.4bn plan with Qatar Petroleum to develop Al Karaana petrochemical project in Qatar.

The oil firm also announced that it would cut investment by $15bn over the next three years. In December, another oil major BP announced its plan to axe hundreds of jobs.

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Berkshire Hathaway divests stake in Exxon Mobil for $3.74bn