NEW YORK: Investment tycoon Warren Buffett agreed on Wednesday to invest three billion dollars in US conglomerate General Electric, expressing confidence in the company’s long-term outlook.

The move came as GE said it was selling at least 12 billion dollars in new shares in addition to the investment from Buffett, who will obtain preferred stock through his Berkshire Hathaway holding company.

Buffett, who is ranked the world’s second richest individual by Forbes magazine with an estimated worth of 50 billion dollars, will have an option to purchase an additional three billion dollars of the common shares.

“GE is the symbol of American business to the world. I have been a friend and admirer of GE and its leaders for decades,” Buffett said in a statement.

“They have strong global brands and businesses with which I am quite familiar. I am confident that GE will continue to be successful in the years to come.”

GE chief executive Jeff Immelt said the investment “enhances our flexibility and allows us to execute on our liquidity plan even faster” and also “gives us the opportunity to play offence in this market should conditions allow.”

“The economic environment remains volatile,” Immelt said. “However, the company’s performance remains on track with the earnings guidance we provided last week for 2008.”

Last month, GE, a bellwether for the US economy, slashed its earnings guidance and warned of difficult times ahead due to the global credit crunch.

In July, GE announced a new “simplified” organisational structure around four core segments as it set the stage for a spin-off of its consumer and appliance businesses.

GE’s divisions include Technology Infrastructure, which includes health care, aviation and transportation; and GE Energy Infrastructure, making generators, wind turbines and other equipment for the energy sector.

GE Capital, another of the new segments, includes financial services including commercial finance and GE Money consumer finance.

GE also controls NBC Universal, the media-entertainment powerhouse that includes NBC television and Universal Pictures.