Buffett's firm to become Bank of America's biggest investor

Warren Buffett's company is likely to become Bank of America's largest investor soon because the bank received approval to boost its dividend.

Buffett's Berkshire Hathaway holds warrants to buy 700 million shares of Bank of America stock. It received the warrants in 2011 when Buffett invested $5 billion in the bank.

Berkshire has received $300 million a year in interest payments tied to the investment, but now that Bank of America plans to increase its annual dividend to 48 cents per share Berkshire would make more by converting the warrants to common stock and collecting the dividend.

The 700 million shares would give Berkshire a stake of about 6.5 percent in the bank based in Charlotte, North Carolina.

Buffett told his shareholders earlier this year that he planned to trade Berkshire's preferred stock for common shares once Bank of America raised its dividend over 44 cents.

Berkshire is also a major shareholder in Wells Fargo, American Express and Goldman Sachs.