Buffett: Dividend Possible for Berkshire in Future

The Berkshire Hathaway chairman says it's possible if the company's cash pile doesn't yield better results.
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Updated from April 30

Warren Buffett says

Berkshire Hathaway

(BRKA)

will consider paying a dividend in the future if the holding company can't generate sufficient returns on its cash, according to media reports.

Buffett also said Berkshire will announce a near $1 billion acquisition of another insurance business in the next few weeks.

Speaking Saturday at Berkshire's annual shareholder meeting in Omaha, Neb., the legendary investor said that if the company doesn't produce more than a dollar in returns for each dollar it retains, then a dividend is logical.

Berkshire had

$43 billion in cash and cash equivalents at the end of 2004.

In other developments:

Buffett said he couldn't comment on probes involving reinsurance companies. A transaction between Berkshire subsidiary General Re and embattled insurance giant American International Group is being investigated by New York Attorney General Eliot Spitzer. Buffett, who Spitzer said is not a target in the probe, said he didn't want to compromise the integrity of the investigation.

Buffett, who is the company chairman and CEO, and Berkshire Vice Chariman Charles Munger also criticized the proposed mergers of the New York Stock Exchange and Archipelago, and the Nasdaq Stock Market and Instinet. Buffett said the mergers would make the exchanges more susceptible to pressure to increase profits, by promoting more trades or charging more commissions, which he believes is detrimental to investors.

Microsoft Chairman Bill Gates was elected to the Berkshire board of directors Saturday. Gates had been appointed to the board in December to fill a vacancy created when Buffett's wife died.

Berkshire is continuing its bet against the dollar with positions in various foreign currencies.