Berkshire Hathaway Announces Agreement to Invest in Home Capital

OMAHA, Neb.–(BUSINESS WIRE)–Berkshire Hathaway Inc. (NYSE: BRK.A; BRK.B) (“Berkshire”)
announced today that its wholly-owned subsidiary, Columbia Insurance
Company (“Columbia”), has entered into an investment agreement
(the “Investment Agreement”) pursuant to which it has agreed to
make an initial investment (the “Initial Investment”) of
C$153,225,739 to acquire 16,044,580 common shares (“Common
Shares”) of Home Capital Group Inc. (“Home Capital”) on a
private placement basis, representing an approximate 19.99% equity stake
in Home Capital on a post-issuance basis (25% on a pre-issuance basis).
Subject to approval from the Toronto Stock Exchange for reliance on the
“financial hardship” provisions of the TSX Company Manual, the Initial
Investment will not require approval of Home Capital’s shareholders and
is expected to close on June 29, 2017. The Initial Investment is subject
to customary closing conditions and is not subject to any financing or
diligence condition. Columbia also agreed to make an additional
investment (the “Additional Investment”) of C$246,774,261 to
acquire 23,955,420 Common Shares on a private placement basis, which,
together with its Initial Investment, would represent an approximate
38.39% equity stake in Home Capital. The Additional Investment will be
subject to approval by not less than a majority of the votes cast by
Home Capital’s shareholders (excluding the Common Shares beneficially
held by Berkshire, or over which it exercises control or direction) at a
special meeting of shareholders that is expected to take place in
September 2017. The Additional Investment is also subject to Canadian
Competition Act clearance and other customary closing conditions. If
approved by Home Capital’s shareholders, it is anticipated that the
Additional Investment would close shortly after the required special
shareholders meeting.

Berkshire will not be granted any rights to nominate directors of Home
Capital or any governance rights as an equity holder pursuant to the
Investment Agreement. Berkshire will be granted customary registration
rights for transactions with a significant shareholder in connection
with the Additional Investment. In addition, Berkshire has agreed that
for as long as it owns more than 25% of the outstanding Common Shares it
will only be entitled to vote that number of shares that represents 25%
of the outstanding Common Shares, unless and until it obtains the
required regulatory approvals to enable it to vote greater than a 25%
interest.

The Investment Agreement contains non-solicitation covenants of Home
Capital, subject to fiduciary obligations of the board of directors of
Home Capital (the “Board”). The Board has agreed to recommend to
the shareholders that they vote in favour of the Additional Investment.
If the Board makes a change in its recommendation for any reason and
shareholder approval of the Additional Investment by the Investor is not
obtained, then the terms of the New Credit Agreement (defined below)
shall automatically increase the interest rate on outstanding balances
by 0.5% per annum and a standby fee on undrawn funds will increase by
0.75% per annum. If there is a change in the Board’s recommendation and
shareholder approval of the Additional Investment is not obtained, these
amended terms to the New Credit Agreement would be effective regardless
of whether the Company enters into any agreement to complete an
alternative transaction.

Concurrently with the execution of the Investment Agreement, Home
Capital caused Home Trust Company, as borrower, to agree to enter into a
new C$2 billion loan facility (the “New Credit Agreement”)
with a wholly-owned subsidiary of Berkshire, as the agent and initial
lender, to be secured against a portfolio of mortgages originated by
Home Trust Company. The New Credit Agreement will replace the C$2
billion loan facility made as of May 1, 2017 between Home Trust Company,
as borrower, and a major institutional investor, and is expected to be
effective on June 29, 2017.

The Common Shares will be acquired for investment purposes. Berkshire
will evaluate its investment in Home Capital from time to time and may,
based on such evaluation, market conditions and other circumstances,
increase or decrease its shareholdings as circumstances require pursuant
to the registration rights agreement contemplated in the Investment
Agreement, market transactions, private agreements, or otherwise, in
each case in accordance with applicable securities laws.

This press release is issued pursuant to National Instrument 62-103 – The
Early Warning System and Related Take-Over Bid and Insider Reporting
Issues, which requires a report to be filed under Home Capital’s
profile on SEDAR (www.sedar.com)
containing additional information with respect to the foregoing matters.
A copy of such report may be obtained by contacting Marc D. Hamburg,
Senior Vice President and Chief Financial Officer at (402) 346-1400.
Columbia has an office c/o Berkshire Hathaway Inc., 3555 Farnam Street,
Suite 1440, Omaha, NE 68131.

About Berkshire Hathaway (www.berkshirehathaway.com):

Berkshire Hathaway and its subsidiaries engage in diverse business
activities including insurance and reinsurance, utilities and energy,
freight rail transportation, finance, manufacturing, retailing and
services. Common stock of Berkshire is listed on the New York Stock
Exchange, trading symbols BRK.A and BRK.B.

Cautionary Statement

Certain statements contained in this press release are “forward looking”
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 and Canadian securities legislation. These statements
are not guaranties of future performance and actual results may differ
materially from those forecasted.

Contacts

Berkshire Hathaway Inc.
Marc D. Hamburg, 402-346-1400