Warren E. Buffett began buying shares in The Washington Post Company in 1973, setting up a longstanding friendship with the Graham family who controlled the company â€" and a highly lucrative investment to boot.
Forty-one years later, the Midwestern billionaire is close to severing most of his financial ties to the company’s successor, Graham Holdings.
Berkshire Hathaway, the conglomerate that Mr. Buffett controls, disclosed on Wednesday that it plans to exchange the bulk of its holdings in Graham Holdings â€" about 1.6 million shares â€" for the Miami television station WPLG, cash and some shares that Graham holds in Berkshire.
The asset swap, worth about $1.1 billion as of Tuesday’s market close, will be the biggest change for the Graham family since last summer, when it sold The Washington Post to Amazon.com’s founder Jeff Bezos for $250 million. That left the family’s company, rechristened Graham Holdings, with an eclectic mix of other businesses, notably the Kaplan education empire.
And through the deal, Mr. Buffett will add a television station to his burgeoning media holdings, which already include a number of newspapers.
“I am sure this is a mutually beneficial transaction for both companies,†Mr. Buffett said in a statement on Wednesday. “While this transaction will greatly reduce our position in Graham Holdings, our admiration for the company and its management is undiminished.â€
Perhaps most important, however, it signals the biggest change in one of the most enduring relationships in the media industry. Though Mr. Buffett initially alarmed Katharine Graham, The Washington Post’s publisher, with his stock purchases, she soon invited him to join the newspaper company’s board.
The two became fast friends, with the billionaire often dispensing business advice to Ms. Graham. In return, Ms. Graham introduced her friend to high society.
Berkshire signaled last month that it planned to reduce its stake in Graham Holdings through an asset swap intended to minimize its tax bill.
