SCHEDULE 13D/A: Berkshire Hathaway Affiliates Adjust DaVita Stake to Maintain 45% Ownership Through Share Repurchase Agreement

Berkshire Hathaway and its affiliates have updated their Schedule 13D filing for DaVita Inc., reflecting a recent share repurchase by DaVita that maintains Berkshire's aggregate beneficial ownership at 45.0% of the outstanding common stock.

Summary

• Berkshire Hathaway Inc. and its affiliates, including Warren E. Buffett, collectively beneficially own 35,892,479 shares of DaVita Inc. (DVA) Common Stock, representing 45.0% of the outstanding shares.
• This Amendment No. 12 to Schedule 13D was filed due to DaVita's repurchase of its own shares.
• On February 11, 2025, Government Employees Insurance Company (GEICO), a Berkshire subsidiary, sold 203,091 shares of DVA Common Stock to DaVita at a price of $156.011 per share.
• This sale was conducted under a Share Repurchase Agreement established on April 30, 2024, between DaVita and Berkshire.
• The agreement mandates DaVita to repurchase shares from Berkshire quarterly if Berkshire's beneficial ownership exceeds 45.0%, aiming to return it to that threshold.
• The repurchase price is the volume-weighted average price paid by DaVita for shares repurchased from public stockholders during the applicable period.
• Repurchases occur two business days prior to DaVita's quarterly or annual earnings calls, with an immediate trigger if Berkshire's ownership exceeds 49.5%.
• Berkshire also agreed to vote any shares exceeding 40% of outstanding common stock in accordance with DaVita's board of directors' recommendations.
• As of January 31, 2025, approximately 80.0 million shares of DVA Common Stock were issued and outstanding.

Sentiment

Score: 6

Explanation: The document reflects a pre-arranged, systematic adjustment of a major shareholder's stake, which is a neutral event in itself. The existence of the repurchase agreement and the commitment to maintain a significant stake could be viewed as mildly positive for stability and shareholder returns, but it's not a performance update.

Positives

• The ongoing share repurchase agreement demonstrates DaVita's commitment to returning capital to shareholders, including its largest investor, Berkshire Hathaway.
• The structured repurchase mechanism provides clarity and predictability regarding Berkshire's ownership stake, stabilizing a significant portion of the shareholder base.
• The agreement ensures that Berkshire's stake remains at a specific level (45.0%), which could be seen as a vote of confidence from a major, long-term investor.

Negatives

• The sale of 203,091 shares by GEICO, while part of a pre-arranged agreement, represents a reduction in the absolute number of shares held by a Berkshire affiliate.

Risks

• Concentration Risk: Berkshire Hathaway's significant 45.0% ownership stake means that DaVita's stock performance is heavily influenced by the decisions and actions of a single large investor group.
• Governance Influence: The agreement for Berkshire to vote shares exceeding 40% in line with the board's recommendation, while seemingly supportive, also highlights the substantial influence Berkshire could exert on corporate governance matters.

Future Outlook

The Share Repurchase Agreement outlines a clear future mechanism for DaVita to repurchase shares from Berkshire Hathaway and its affiliates on a quarterly basis, specifically designed to maintain Berkshire's aggregate beneficial ownership at 45.0% of the issued and outstanding common stock. These repurchases are scheduled to occur two business days prior to DaVita's regular quarterly or annual earnings calls.

Industry Context

This filing primarily details a significant ownership adjustment and ongoing agreement between a major institutional investor (Berkshire Hathaway) and a publicly traded healthcare company (DaVita Inc.), rather than reflecting broader industry trends. However, the continued large stake by Berkshire in a dialysis provider like DaVita underscores the long-term investment perspective some major players hold in the stable, albeit regulated, healthcare services sector.

Corporate Governance

Related Party Transactions

• The Share Repurchase Agreement between DaVita Inc. and Berkshire Hathaway Inc. (and its affiliates), the largest stockholder of DVA, constitutes a related party transaction.
• This agreement dictates quarterly repurchases of DVA Common Stock from Berkshire to maintain its 45.0% ownership stake.
• The sale of 203,091 shares by Government Employees Insurance Company (a Berkshire subsidiary) to DaVita on February 11, 2025, at $156.011 per share, was executed under this agreement.

Stakeholder Impact

• Shareholders: The ongoing share repurchase program, facilitated by this agreement, can reduce the number of outstanding shares, potentially increasing earnings per share for remaining shareholders. It also provides a structured exit for a portion of Berkshire's holdings without market disruption.
• Management/Board: The voting agreement ensures that Berkshire's significant voting power (for shares above 40%) aligns with the board's recommendations, potentially simplifying governance decisions.

Next Steps

• DaVita Inc. is expected to continue repurchasing shares from Berkshire Hathaway and its affiliates on a quarterly basis, two business days prior to its regular quarterly or annual earnings calls, to maintain Berkshire's ownership at 45.0%.
• DaVita will continue to file its regular quarterly and annual earnings reports.

Key Dates

Keywords

DaVita Inc., DVA, Berkshire Hathaway, Warren Buffett, SEC filing, Schedule 13D, share repurchase, stock ownership, institutional investment, corporate governance, equity stake, healthcare services, dialysis