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Buffett’s Berkshire cuts U.S. drugmaker stakes, invests in drug royalty company

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November 15, 2021

By Jonathan Stempel

(Reuters) -Warren Buffett’s Berkshire Hathaway Inc said on Monday it eliminated its investment in Merck & Co and reduced its stakes in AbbVie Inc and Bristol-Myers Squibb Co, as it pared its overall stock market investments.

Berkshire also eliminated its small stakes in Organon & Co, a Merck spinoff specializing in contraception and other women’s health products, and telecommunications company Liberty Global Plc.

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It disclosed new investments of $475 million in Royalty Pharma Plc, which buys drug royalties, and $99 million in flooring retailer Floor & Decor Holdings Inc.

The changes were disclosed in a regulatory filing detailing Berkshire’s U.S.-listed holdings as of Sept. 30.

Shares of Royalty Pharma rose more than 5% after the market close, a common occurrence after Berkshire reveals new stakes. Royalty Pharma did not immediately respond to requests for comment.

Investors monitor Berkshire’s investments closely to see where Buffett and his investment managers Todd Combs and Ted Weschler see value. The filings do not say who bought and sold what, though Buffett generally handles larger investments.

While Berkshire ended September with $310.7 billion of equity holdings, it sold $2 billion more stocks than it bought in the third quarter, and has been a net seller for all of 2021.

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About 41% of Berkshire’s stock investments are in Apple, with another 29% in Bank of America Corp, American Express Co and Coca-Cola Co.

The sales and Buffett’s nearly six-year drought in buying large whole companies have contributed to Berkshire’s boosting its cash holdings to a record https://www.reuters.com/article/berkshire-results-idCAKBN2HR092 $149.2 billion, despite at least $21.9 billion of stock buybacks this year.

They have also disappointed investors who have seen Berkshire’s stock price significantly lag the Standard & Poor’s 500 since the end of 2018.

Berkshire’s respective share stakes in AbbVie and Bristol-Myers fell 30% and 16% in the quarter.

Royalty Pharma helps fund late-stage clinical trials and product launches in exchange for future royalty streams, and sometimes buys royalties from drug developers.

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Its larger revenue streams come from Vertex Pharmaceuticals Inc treatments for cystic fibrosis, Biogen Inc’s Tysabri for multiple sclerosis, and AbbVie’s Imbruvica for various cancers.

The company’s share price has recently traded about 50% above its initial public offering price in June 2020, but below where it closed on its first trading day.

Berkshire is based in Omaha, Nebraska. It also owns dozens of businesses including the BNSF railroad, Geico auto insurance and Dairy Queen ice cream.

(Reporting by Jonathan Stempel in New York;Editing by Chris Reese and Stephen Coates)

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Canada’s Shopify records Black Friday sales up 21%

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November 27, 2021

(Reuters) – Canadian e-commerce company Shopify Inc recorded worldwide sales of nearly $2.9 billion on Black Friday, an increase of about 21% in comparison to last year, the company said Saturday.

New York, London and Los Angeles were among the top-selling cities, the company said, while apparel and accessories was the top-selling product category.

Shopify also said it funded 23,000+ tonnes of carbon removal to counteract emissions from the delivery of every order placed on its platform on Black Friday.

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(Reporting by Aakriti Bhalla in Bengaluru; Editing by Nick Zieminski)

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Xiaomi to open car plant in Beijing with annual output of 300,000 vehicles – Beijing govt

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November 27, 2021

SHANGHAI (Reuters) – Chinese smartphone giant Xiaomi Corp will build a plant that can produce 300,000 vehicles annually in Beijing for its electric vehicle unit, authorities in the capital said on Saturday.

The plant will be constructed in two phases and Xiaomi will also built its auto unit’s headquarters, sales and research offices in the Beijing Economic and Technological Development Zone, the government-backed economic development agency Beijing E-Town said on its official WeChat account.

Beijing E-Town said it anticipated the plant reaching mass production in 2024, a goal announced by Xiaomi’s Chief Executive Lei Jun in October.

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In March, Xiaomi said it would commit to investing $10 billion in a new electric car division over 10 years. The company completed the business registration of its EV unit in late August.

The company has been opening thousands of stores to spur domestic sales growth for its smartphone business but eventually intends to use these shops as a channel for its plans to sell electric vehicles.

(Reporting by Brenda Goh; Editing by William Mallard)

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Eni sells Snam 49.9% stake in Algeria gas pipelines for 385 million euros

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November 27, 2021

MILAN (Reuters) -Italian energy group Eni has agreed to sell gas group Snam 49.9% of its stake in strategic pipelines carrying Algerian gas into Italy for 385 million euros ($436 million), the two companies said on Saturday.

The pipelines will be jointly controlled by the two companies, they said in a joint statement.

Italy imports more than 90% of its overall gas needs and Algerian gas currently accounts for around 30% of flows.

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“This transaction allows us to free up new resources to be used on our energy transition path,” Eni Chief Executive Claudio Descalzi said.

Eni is working on spinning off a series of oil and gas operations into new joint ventures to help reduce debt and fund its shift to low-carbon energy.

Snam, which owns a 20% stake in the TAP pipeline that carries Azeri gas into Italy, makes most of its money from managing Italy’s gas transport grid.

It has pledged to spend more on new green business lines such as hydrogen and, like other gas grid operators in Europe, is upgrading its gas network to be hydrogen ready.

“In the future, North Africa could also become a hub for producing solar energy and green hydrogen,” Snam CEO Marco Alvera said.

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The pipeline companies involved in the deal posted net income of around 90 million euros in 2020.

($1 = 0.8836 euros)

(Reporting by Stephen Jewkes, editing by Giselda Vagnoni)

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