(CHARLOTTE) -- Bank of America Corp. has reached an agreement to sell 50,000 shares of Cumulative Perpetual Preferred Stock, with a liquidation value of $100,000 per share, to Berkshire Hathaway, Inc. Berkshire Hathaway is headed by billionaire investor Warren Buffett.

In conjunction with this agreement, Berkshire Hathaway will also receive warrants to purchase 700,000,000 shares of Bank of America common stock at an exercise price of $7.142857 per share. The aggregate purchase price to be received by Bank of America for the preferred stock and warrants is $5 billion in cash.

“We are building the best franchise in financial services and we have laid out a clear plan to deliver long-term shareholder value,” said Bank of America Chief Executive Officer Brian Moynihan. “I remain confident that we have the capital and liquidity we need to run our business. At the same time, I also recognize that a large investment by Warren Buffett is a strong endorsement in our vision and our strategy.”

Buffet initiated the transaction. “I am impressed with the profit-generating abilities of this franchise, and that they are acting aggressively to put their challenges behind them," said Buffett.