Warren Buffett Offered Uber a $3 Billion Investment, But Talks Fell Apart

Warren Buffett earlier this year offered to invest $3 billion in Uber Technologies Inc., but the two sides couldn’t agree on the terms, according to a person familiar with the matter.

The talks between Mr. Buffett’s Berkshire Hathaway Inc. BRK.B 2.23% and Uber, reported earlier by Bloomberg News, came on the heels of a multibillion investment in the ride-hailing firm by SoftBank Group Inc. In January, the Japanese firm invested $1.25 billion directly in Uber at around a $70 billion valuation, and bought another $6.5 billion worth of employees and investor shares at a $48 billion valuation.

Dara Khosrowshahi, who became Uber’s CEO last summer, is trying to prepare the company for a planned initial public offering in 2019. The IPO, if it happens, is expected to be one of the largest in recent memory. But Mr. Khowsrowshahi is working to pare costs after the company reported a loss of $4.5 billion last year, while repairing Uber’s relationship with drivers and riders following a year of scandal.

Uber’s revenue is growing quickly—up 70% in the first quarter to $2.59 billion—and has a strong cash position thanks to previous funding. As of March 31, it held $6.3 billion in cash, according to the company’s recent financial statements reviewed by The Wall Street Journal.

Berkshire has a history of investing in troubled companies in exchange for favorable terms. During the financial crisis, Berkshire threw lifelines to companies including Goldman Sachs Group Inc. and General Electric Co. The company earned billions on those investments.

More recently, Mr. Buffett has struggled to find sizable attractive buys. His company has piled up more than $100 billion in cash.

Mr. Buffett has typically avoided investing in technology companies, saying they are outside his area of expertise. But Berkshire has become one of the largest owners of Apple Inc. in recent years.

Berkshire’s auto-related subsidiaries include car insurer Geico and dealership chain Berkshire Hathaway Automotive. Berkshire also held General Motors Co. stock as of March 31.

Write to Greg Bensinger at greg.bensinger@wsj.com and Nicole Friedman at nicole.friedman@wsj.com

Appeared in the May 31, 2018, print edition as ‘Buffett Sought $3 Billion Investment in Uber.’

Source Article