Shares of DaVita, a kidney care service provider, jumped 12.52% to $68.50 on Wednesday after UnitedHealth Group said it would buy the company’s medical unit for $4.9 billion.
Warren Buffett’s Berkshire Hathaway is the largest shareholder in Davita, according to data from Bloomberg. The company owns about 38 million shares or about 21% of the total outstanding shares. Buffett raked in about $295 million on Wednesday after DaVita moved higher. The gains are only on paper thus far, and Berkshire Hathaway would have to liquidate its shares to realize the gains.
The deal will be financed with cash and would combine UnitedHealth’s Optum unit with DaVita’s 300 clinic network that serves about 1.7 people annually.
DaVita has said it will use the money from the sale for stock buybacks and repaying debt after the deal closes, which is expected to occur sometime next year.
UnitedHealth is little changed near $220.10 on the news. Its shares are up 36.48% this year, while DaVita is higher by just 0.74%.