Berkshire Hathaway Inc.
Diversified Holding Company / Financial ServicesFounded 1839- Updated June 2026
Reviewed by Swet Parvadiya
Last reviewed: June 2026
CorpDigest
Berkshire Hathaway Inc.
Company History
Founded 1839 in Omaha, Nebraska
Last reviewed: 2026-06-03 · By Swet Parvadiya
Berkshire Hathaway began life in 1839 as a New England cotton mill, passed through generations of textile operators, and was, by the early 1960s, a dying industry relic struggling to compete against cheaper Southern and overseas labor. The problem is, originally a textile company founded in 1839, it was acquired by Warren Buffett in 1965 and systematically transformed into a diversified holding company with major operations in insurance (GEICO, General Re), transportation (BNSF Railway), utilities (Berkshire Hathaway Energy), manufacturing, retail, and financial services. While Greg Abel has been designated as Berkshire's next CEO — a transition already effectively underway as Buffett stepped back from day-to-day capital allocation of operating businesses — the question of whether Berkshire's culture, discipline, and reputation can survive the transition from its iconic founder remains open. The institution that became Berkshire Hathaway began not in Omaha, Nebraska, but in Valley Falls, Rhode Island, where Oliver Chace established the Valley Falls Company, a cotton textile manufacturer, in 1839. Buffett began accumulating Berkshire Hathaway shares in 1962, initially intending simply to sell them back to management at a profit. In what Buffett has since described as an irrational emotional response, he was so irritated by this slight that instead of selling his shares, he began buying more aggressively. However, and this is the shift that changed American business history, Buffett used Berkshire's textile cash flows — meager as they were — and began redeploying that capital into insurance.
Oliver Chace founded the Valley Falls Company in 1839, which is recognized as one of the foundational predecessor companies to what eventually became Berkshire Hathaway Inc. Working in the tradition established by Samuel Slater's introduction of British textile machinery to American manufacturing, Chace established a cotton mill in Valley Falls, Rhode Island, at a time when New England was the undisputed center of American industrial production. His operation benefited from the region's water power resources, proximity to East Coast ports for cotton importation and finished goods distribution, and access to a growing skilled workforce. The Valley Falls Company and related Chace family textile interests contributed to the dense network of New England textile mills that would eventually consolidate under competitive pressure. While Chace could not have anticipated the extraordinary transformation his mill would undergo more than a century later under Warren Buffett's direction, his founding of a durable New England textile enterprise provided the corporate shell that Buffett would repurpose into one of the world's greatest holding companies.
Warren Buffett effectively refounded Berkshire Hathaway beginning in 1965 when his investment partnership gained control of the struggling New England textile company and he became its chairman and CEO. Over the following six decades, Buffett transformed Berkshire from a failing textile operation into one of the world's most valuable and admired companies, deploying insurance float into a diverse portfolio of wholly-owned businesses and publicly traded equities. Buffett's investment approach—patient, value-oriented, concentrated, and long-term—generated compound annual returns that significantly outpaced the S&P 500 over his tenure. He is widely regarded as the greatest investor in history. His annual letters to Berkshire shareholders have become required reading in business schools worldwide for their clarity of thought, ethical grounding, and practical wisdom about capital allocation. Buffett has pledged to donate virtually his entire fortune to philanthropy through the Giving Pledge he co-founded with Bill and Melinda Gates. As of mid-2025, Buffett retains the chairman role at Berkshire while Greg Abel manages day-to-day operations.
Oliver Chace establishes the Valley Falls Company in Valley Falls, Rhode Island, as a cotton textile manufacturer. This predecessor company is the earliest corporate ancestor of what will become Berkshire Hathaway nearly 185 years later.
Berkshire Fine Spinning Associates merges with Hathaway Manufacturing Company of New Bedford, Massachusetts, to form Berkshire Hathaway Inc. The merged company operates multiple textile mills across New England and employs approximately 12,000 workers, but faces mounting competitive pressure from lower-cost Southern and overseas producers.
Warren Buffett's investment partnership acquires a controlling interest in Berkshire Hathaway and Buffett is named chairman and CEO. Buffett initially intends to sell the stock at a profit but is drawn into operational control after a dispute with management over tender offer terms. This acquisition, which Buffett later calls his 'biggest mistake,' becomes the foundation of his business empire.
Berkshire acquires National Indemnity Company and National Fire & Marine Insurance Company from Jack Ringwalt for $8.6 million. These acquisitions introduce Buffett to the insurance float concept that will define Berkshire's business model for the next five decades. National Indemnity remains one of Berkshire's most important subsidiaries.
Berkshire acquires See's Candies of San Francisco for $25 million, which Buffett later calls the most important acquisition of his career. See's demonstrates the extraordinary economics of a branded consumer business with pricing power and loyal customers. Over the following decades, See's generates more than $2 billion in cumulative pre-tax earnings on its original purchase price.
Berkshire closes its last textile manufacturing operations twenty years after Buffett took control. The mills had been drained of cash that was redeployed into far more productive enterprises. The closure results in significant job losses in New England communities but ends two decades of capital misallocation into a structurally disadvantaged industry.
Berkshire acquires the remaining 50% of GEICO Corporation it does not already own for approximately $2.3 billion, making GEICO a wholly-owned subsidiary. GEICO, founded in 1936 as the Government Employees Insurance Company, becomes the centerpiece of Berkshire's insurance operations and eventually grows to insure more than 18 million vehicles across the United States.
Berkshire acquires General Re Corporation for approximately $22 billion in stock—the largest acquisition in Berkshire's history at the time. General Re provides global property and casualty reinsurance operations and significantly expands Berkshire's insurance float. The acquisition has some early challenges related to derivatives exposure but ultimately strengthens Berkshire's global insurance position.
Berkshire acquires Burlington Northern Santa Fe Corporation (BNSF) for approximately $44 billion including assumed debt—at the time the largest acquisition in Berkshire's history. Buffett calls it an 'all-in wager on the economic future of the United States.' BNSF operates 32,500 route miles across 28 states and becomes one of Berkshire's most important wholly-owned subsidiaries.
Berkshire acquires Precision Castparts Corp., a manufacturer of aerospace and industrial components, for approximately $37.2 billion—surpassing the BNSF acquisition as Berkshire's largest ever. The acquisition significantly expands Berkshire's manufacturing presence in aerospace supply chains. Precision Castparts faces challenges during the COVID-19 pandemic as commercial aviation collapses temporarily.
Warren Buffett publicly confirms that Greg Abel, vice chairman for non-insurance operations, is his designated successor as CEO of Berkshire Hathaway. This announcement ends decades of speculation about Berkshire's succession plan and begins a gradual transition of operational authority from Buffett to Abel that continues through 2024 and into 2025.
Berkshire reports record operating earnings of approximately $47.4 billion for FY2024 and ends the year with a record cash and Treasury bill position of $334 billion—reflecting both strong business performance and Buffett's unwillingness to deploy capital at prices he considers inadequate. The company reduces its Apple stake from over 900 million shares to approximately 300 million shares throughout the year.
Berkshire acquired the remaining 50% of GEICO it did not already own to make the auto insurer a wholly-owned subsidiary, giving Berkshire full control over what it viewed as America's most cost-efficient personal auto insurer. The acquisition expanded Berkshire's insurance float significantly and positioned GEICO for aggressive growth through its direct-to-consumer model. Buffett had been attracted to GEICO since his early investing days, when he visited the company's headquarters as a young man after reading about Benjamin Graham's position in the stock.
Berkshire acquired General Re in an all-stock transaction to gain a major global reinsurance platform and significantly expand its insurance float. General Re was one of the world's preeminent property and casualty reinsurers with operations across North America, Europe, and Asia, providing Berkshire with global diversification in its insurance operations. The acquisition also brought a substantial investment portfolio that Buffett intended to rebalance toward Berkshire's preferred investment approach.
Berkshire acquired BNSF in what was at the time the largest acquisition in the company's history, expressing Buffett's conviction that freight railroads are essential infrastructure for the American economy with sustainable competitive moats. BNSF's 32,500 route miles across 28 states represented a natural monopoly in many of the geographies it served, with barriers to entry—capital requirements, right-of-way, regulatory approvals—that effectively precluded new competitors. Buffett called it an 'all-in wager on the economic future of the United States.'
Berkshire acquired Precision Castparts to gain a market-leading manufacturer of complex metal components and fastener systems for aerospace, power generation, and industrial markets. PCC's position in aerospace supply chains—providing investment castings and forged components to Boeing, Airbus, and military programs—offered the kind of essential, technically complex manufacturing that Buffett considers difficult to replicate. The acquisition made Berkshire a major participant in commercial aviation supply chains.
Berkshire acquired McLane Company from Walmart, which was divesting the distribution subsidiary as part of a strategic focus on its core retail operations. McLane operates one of the largest wholesale distribution networks in the United States, serving convenience stores, drug stores, military commissaries, and quick-service restaurants. The acquisition gave Berkshire ownership of critical supply chain infrastructure for the convenience retail sector with strong, long-term customer relationships.
Warren Buffett began buying Berkshire Hathaway shares in 1962 as a classic value investment in a struggling New England textile company, but in 1964 became furious when CEO Seabury Stanton reneged on a promised buyback price, causing Buffett to buy a controlling stake out of spite. Buffett later called this 'the dumbest stock I ever bought,' as the textile business was structurally declining and consumed capital that could have been deployed elsewhere. He used Berkshire as a holding company vehicle, redirecting its cash flows into insurance businesses (National Indemnity, acquired 1967) whose float could be invested, and transformed a dying textile company into history's greatest investment vehicle. The textile operations were finally closed in 1985, but the Berkshire name and corporate structure provided the platform for a $1 trillion empire.
Berkshire Hathaway shifted from primarily holding minority stock positions to acquiring entire businesses starting with the 1972 purchase of See's Candies for $25 million — the deal Buffett later credited with teaching him the value of pricing power and durable competitive advantages over cheap-but-mediocre 'cigar butt' businesses. The shift accelerated through the 1990s with acquisitions including Geico (1996, $2.3 billion), General Re (1998, $22 billion), and later BNSF Railway (2009, $26 billion) and Berkshire Hathaway Energy (formerly MidAmerican Energy). By 2024 Berkshire's wholly-owned businesses generated $175+ billion in operating revenue, with equity investments in Apple, Bank of America, and others providing another $150+ billion in value — a hybrid model combining permanent ownership with equity investing.
Berkshire's $22 billion acquisition of General Re (reinsurance) in 1998 proved problematic as General Re had inadequately reserved for asbestos and environmental liabilities, and its derivatives book of 23,218 contracts took four years and $400 million to unwind — an experience prompting Buffett to call derivatives 'financial weapons of mass destruction' in his 2002 letter. The General Re acquisition also contributed to Berkshire's 11 employees arrested in a scandal involving finite risk reinsurance (2005), and General Re's culture clashed with Berkshire's decentralised model, requiring significant integration effort unusual for Berkshire's typically hands-off ownership. Despite early difficulties, General Re became a valuable property-casualty reinsurer generating $1+ billion in annual underwriting profit by 2020, validating the acquisition after a decade of repair work.
Buffett began purchasing Apple shares in 2016 — breaking his long-held rule against technology companies — investing $36 billion to accumulate 907 million Apple shares representing 5.9% of the company. Apple became Berkshire's largest equity holding, worth $174 billion at peak in 2023, generating $900 million+ in annual dividends and representing a return exceeding 3x on invested capital within six years. The Apple investment demonstrated Buffett's evolution in recognising technology companies with consumer brand loyalty and switching costs as analogous to traditional consumer franchises, and Apple's $90 billion in annual share buybacks effectively increased Berkshire's Apple ownership percentage annually without additional investment. Buffett partially sold Apple shares in 2023-2024, reducing the position but retaining a $130+ billion stake.