Berkshire's Sokol Quits After Lubrizol Share

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3/30/2011 Berkshire's Sokol Quits After Lubrizol S…

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MARKETS MARCH 30, 2011, 6:17 P.M. ET Berkshire's Sokol Quits After Lubrizol Purchases

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By ERIK HOLM David Sokol, long considered by outsiders to be the most likely candidate to succeed Warren Buffett, resigned from Berkshire Hathaway Inc. after purchasing shares of a company he suggested Mr. Buffett buy.

Mr. Buffett, Berkshire's chief executive and chairman, said in a statement Wednesday that Mr. Sokol had told him he owned shares in the chemical company, Lubrizol Corp., when they first discussed the deal in January. Mr. Buffett said "neither Dave nor I feel his Lubrizol purchases were in any way unlawful" and weren't a factor in his decision to resign.

View Full Image Instead, Mr. Buffett said Mr. Sokol wrote in a Bloomberg News letter of resignation on March 28 that he David Sokol spoke to shareholders prior to the wanted to "invest my family's resources in Berkshire Hathaw ay annual meeting in Omaha, Neb., Most Popular in Markets on May 1, 2010. such a way as to create enduring equity value Dow Aims to Notch Quarterly Win Again and hopefully an enterprise which will provide opportunity for my descendents and funding Jailed 'Insider' Suspect Is Exception for my philanthropic interests." Bankruptcy Threatens Alabama County

Mr. Sokol purchased 2,300 shares of Lubrizol Will Barclay s Turn Its Back on Britain? on Dec. 14, which he then sold on Dec. 21, GE Seals $3.2 Billion Power Deal Mr. Buffett said. He then bought 96,060 shares in early January with an order to pay no more than $104 a share. Vote and Discuss

View Full Image Berkshire said March 14 that it had agreed to Are investors mispricing risk? Bloomberg News acquire Lubrizol for $9 billion, or $135 a Yes Warren Buffett listened during a new s conference in share. New Delhi, India, on March 24. No "Dave's purchases were made before he had discussed Lubrizol with me and with no View Results » Read the Berkshire Hathaway Press knowledge of how I might react to his idea," Release Mr. Buffett wrote in the statement. Mr. Buffett Email Newsletters and Alerts said he learned of the extent of the stock purchases shortly before beginning a trip to The latest news and analysis delivered to your in-box. Check the Asia on March 19. boxes below to sign up.

Markets Alert Deals Alert A regulatory filing detailing the Lubrizol purchase indicated last week that Mr. Sokol Heard on the Street Asian Markets identified Lubrizol as a potential acquisition European Markets Price & Volume Alerts and took the lead in early negotiations to buy the company. Mr. Sokol plucked Lubrizol from View Document SIGN UP a list of 18 chemical companies that bankers

…wsj.com/…/SB100014240527487037… 1/3 3/30/2011 Berkshire's Sokol Quits After Lubrizol S… at Citigroup Global Markets had compiled in New! To sign up for Keyword or To view or change all of your Buffett on Sokol December 2010 as possible acquisitions at Symbol Alerts click here. email settings, visit the Email Mr. Sokol's request, according to the filing. Setup Center.

Mr. Sokol met with Lubrizol's chief executive, James Hambrick, in January to discuss the Video corporate culture at the two companies, and told him a Berkshire takeover offer would be contingent on Mr. Hambrick's agreeing to

stay on as CEO. It was after Mr. Hambrick and his board had agreed to move forward with takeover talks that Mr. Buffett took the PM Report: Sm all News Hub: Ma r ket s Hu b: Cap St ocks Hit 3- Ma n power Gr ou p St ocks Brea k Ou t David Yellen lead, the filing said. 1/2 Year High CEO on t h e 5:28 13:47 Return of Jobs 4:25 Read a collection of Buffett's comments about Mr. Sokol "knew he would have no voice in Sokol over the years Berkshire's decision once he suggested the idea; it would be up to me and [Berkshire Most Popular Vice Chairman] Charlie Munger, subject to ratification by the Berkshire Board of which Dave is Read Emailed Video Commented Searches not a member," Mr. Buffett said in the statement.

"As late as January 24, I sent Dave a short note indicating my skepticism about making an offer 1. Microsoft Co-Founder Hits Out at Gates for Lubrizol and my preference for another substantial acquisition for which MidAmerican had made a bid. Only after Dave reported on the January 25 dinner conversation with James 2. Obama to Speak on Energy Policy Hambrick did I get interested in the acquisition of Lubrizol," Mr. Buffett wrote. 3. The Price of Taxing the Rich

Mr. Buffett said Mr. Sokol had tried two other times in recent years to resign. 4. Amazon Beats Rivals Into the 'Cloud'

Mr. Sokol had been chairman of Berkshire's MidAmerican utility operations and chairman and 5. In Japan, a Choice Between Bad, Worse CEO of its NetJets fractional plane business. Most Read Articles Feed In his statement Wednesday, Mr. Buffett said Mr. Sokol's "contributions have been extraordinary," citing his work at MidAmerican and NetJets, which he described as "an operation that was destined for bankruptcy, absent Berkshire's deep pockets." Latest Tweets Greg Abel, the chief executive of MidAmerican Holding Co., will become its chairman, Mr. Buffett said. Jordan Hansell, president of NetJets, will become its chairman and CEO. WSJDealJournal: Deal Journal: 'American Idol' Backer Robert Sillerman Launches New Media Venture http://bit.ly/eDTe4z Berkshire Hathaway Class B shares fell sharply in after-hours trade after the announcement. Moments ago Write to Erik Holm at [email protected] WSJHeard: A Spring In ArcelorMittal's Step http://on.wsj.com/fhIUMV Write to Erik Holm at [email protected] Moments ago

More WSJMarkets: China's Rate Hike Weighs on Copper Deal Journal: Who Is David Sokol? http://on.wsj.com/idunpR Deal Journal: Buffett Lieutenant Resigns Amid Stock Purchases Moments ago Letter: From Buffett on Sokol's Resignation Earlier: Berkshire's Sokol Kicked Off Lubrizol Deal WSJMarkets: Shorter-Dated Treasurys Ease as Debt Sale Looms http://on.wsj.com/hahrtC