Warren Buffett, the long-time CEO of conglomerate giant Berkshire Hathaway (BRK.A) and (BRK.B) , announced Saturday he will step down probably by the end of the year.
Buffett sprung the announcement at the end of Berkshire’s annual meeting, held as always in Omaha, Neb., where Berkshire is based.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter 💰💵
The 94-year-old Buffett would be succeeded by Greg Abel, who has long been Berkshire’s CEO-in-waiting.
The exact details of the departure still need some fine tuning. Buffett will outline his plans at Sunday’s board meeting in Omaha.
Buffett said he hoped the decision will be ratified at its subsequent meeting in two months.
A Berkshire veteran
Under that scenario, Abel would take over as CEO on Jan. 1, 2026.
Since 2008, the Canadian-born Abel, 62, has been CEO of Berkshire-Hathaway Energy, which owns a vast empire of electric utilities across the country. Abel came to Berkshire in 1999 with Berkshire’s acquisition of Mid-American Energy. Buffett designated Abel as his successor in 2021.
Related: Warren Buffett is entitled to gloat a little
As Buffett made his announcement, he said he’d told no one about his decision except his children Howard and Susan. Both are Berkshire Hathaway directors.
Howard Buffett may take over as executive chairman.
Wants to ‘hang around and be useful’
Warren Buffett said that, after the transition, he expected “to hang around and be useful.”
Presumably “being useful” would include being consulted on any big deals that Abel and Berkshire would propose.
The announcement stunned the annual meeting with some 19,000 attendees. The audience responded by giving Buffett a long standing ovation.
Won’t sell shares
Buffett does not expect to sell any of his Berkshire shares.
He is the largest holder of Berkshire-Hathaway shares. He owns 206,359 shares of the company’s class A stock, about 37% of the total in the class. The stake, based on Friday’s close of $809,350 per share, is worth $167 billion.
He also owns 951 Class B shares, worth an additional $513,000, based on Friday’s $539.80 close.
Berkshire’s Class A and B shares rose about 1.8% on Friday and are up about 19% so far this year. The Standard & Poor’s 500 Index is down 3.3% on the year.
More Warren Buffett:
- Warren Buffett delivers blunt response to social media rumor
- Warren Buffett’s Berkshire drops major mortgage rate revelation
- Warren Buffett overtakes famous rival in important ranking
Berkshire had a market capitalization of $1.42 trillion dollars as of Friday’s close.
That was good enough to rank eighth among U.S. companies by market cap, after Facebook-parent Meta Platforms (META) and ahead of electric-vehicle maker Tesla (TSLA) at $913.7 billion.
A stock broker and investment manager, Buffett bought control of Berkshire Hathaway, then a struggling textile manufacturer, in 1965. He slowly sold off the textile and related businesses and invested heavily in insurance, utilities, retailing and other businesses.
He also dabbled for a time in newspapers as an investor in The Washington Post and, later, owner of The Buffalo News in New York.
Berkshire is big, really big
Berkshire is now one of the largest conglomerates in the country. It holdings include Geico Insurance; the BNSF Railway (the nation’s largest railroad by miles of track; Lubrizol; Pilot Flying J truck stops; Sees Candies; Benjamin Moore paints; Duracell batteries; Fruit of the Loom, and Dairy Queen, the ice-cream chain.
It also has a massive investment portfolio, including stakes in:
- American Express (AXP)
- Apple (AAPL)
- Bank of America (BAC)
- Wells Fargo (WFC)
- Citigroup (C)
- Occidental Petroleum (OXY) .
The Apple stake has been trimmed substantially in the last few years and was down to 300 million shares as of Friday and were worth about $62 billion. Apple CEO Tim Cook was in the Berkshire audience on Saturday.
Related: Apple CEO sends blunt message on tariffs impact
But the drawdown has meant that Berkshire is sitting on investable stake of some $347 billion in cash and short-term Treasury investments.
Those holdings are greater than the combined cash holdings of Apple, Microsoft (MSFT) , Google parent Alphabet (GOOGL) and Amazon.com (AMZN) .
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
