Berkshire Hathaway

Berkshire buys $5B Israeli metal-working firm

In Iscar deal Buffett shows increasing overseas interest

SAN FRANCISCO (MarketWatch) -- Berkshire Hathaway Inc. said on Friday that it agreed to acquire 80% of Iscar Metalworking Companies in a deal that values the Israeli business at $5 billion.
Berkshire is paying $4 billion for its controlling 80% stake. The purchase illustrates Berkshire Chairman Warren Buffett's (BRKA : berkshire hathaway inc del cl a
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BRKA88,710.00, +710.00, +0.8%) penchant for buying family-owned firms as he looks to put more of the company's $40 billion in cash to work.

It's also the latest example of Buffett's diversification into more overseas assets -- a strategy designed to shield Berkshire shareholders (BRKB : berkshire hathaway inc del cl b
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BRKB2,945.00, +35.00, +1.2%) from weakness in the U.S. dollar.
The move comes as Berkshire Hathaway shareholders gather for this weekend's annual meeting in Omaha, Neb., where the quest for more, large acquisitions will likely be high on the agenda. See related story.
Friday's deal for the privately held firm will leave 20% of the company in the hands of the Wertheimer family, IMC's current shareholders and founders.
A rising stock market, continued availability of relatively cheap credit and competition from rival acquirers such as private-equity funds, has made it harder for Berkshire to find big acquisition that fit Buffett's strict value-investing criteria. That's part of the reason why Berkshire shares have stagnated over the past two years.
In his 2004 shareholder letter, Buffett admitted that he'd "struck out" by not making any multi-billion dollar acquisitions that year.
However, Buffett has been more successful in tracking down opportunities recently, buying sports clothing maker Russell and corporate announcement firm BusinessWire earlier this year.
The IMC deal may be the largest Berkshire acquisition since last year's purchase of giant utility PacifiCorp.
"That will eat up a chunk of cash," Jeff Auxier, manager of the Auxier Focus Fund and a Berkshire shareholder, said. "That's three pretty large acquisitions in the past few months."
When buying family-run businesses like IMC, Buffett has an advantage over private-equity funds because he has a reputation for not meddling with the firms he owns, Auxier added.
"For families that own and love their businesses and don't want to sell to private-equity firms, it makes sense to sell to Buffett," Auxier said. "There aren't a lot of buyers out there that won't want to rearrange or dismantle parts of the businesses they buy."
Buffett said in a statement on Friday that the metal cutting tools specialist's business in markets like Europe, Asia and Latin America made it an attractive target.
"With this acquisition, we have the benefit of investing in a stable business with very significant growth prospects," said Buffett in a statement.
Executives from the company will remain in place and the headquarters of IMC will continue to be in Tefen, Israel.
Buffett has become increasingly concerned in recent years about the U.S.'s growing trade imbalances and their potential to weaken the U.S. dollar. In 2002, he increased Berkshire's bets against the dollar and more recently he invested more money in overseas assets to hedge against a decline in the greenback.
IMC, which operates plants in Israel, the U.S., Korea, Brazil, China, Germany, India, Italy and Japan and has customers in 61 countries, should help.
"Owning businesses with operations outside the U.S. is pretty consistent with his recent strategy," Auxier said. "This gives Berkshire greater diversification and he can leave the operations to the family owners."  
Alistair Barr is a reporter for MarketWatch in San Francisco.

I would never die for my believes, because I might be wrong

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soll die Kriegskasse mit 40 Milliarden$ prall gefüllt sein (aktueller Kurs; 87500$).
Die Aktie weist ein interessantes Portfolio auf, zahlt aber keine Dividende. Zumal lässt
die Performance zu Wünschen übrig. Trotzdem stellen ein paar Baby-Berkshire´s eine
gute Alternative zu etwaigen Fonds dar. Ein guter Fundamentalwert m.M. nach  

was sind baby-berkshires?  

 

Berkshire has possible $15B acquisition idea, Buffett says

By Robert Daniel
Last Update: 12:33 PM ET May 6, 2006


OMAHA, Neb. (MarketWatch) -- Berkshire Hathaway Inc. Chairman Warren Buffett said Saturday that the company has a possible $15 billion acquisition idea, a deal that would put a big chunk of its huge cash pile to work. Buffett said, though, that it was a "low-probability" idea. "Whether that comes to fruition isn't clear, but we're working on it," he said during the Berkshire annual meeting here. Buffett also said Berkshire will get more opportunities to acquire utility businesses. "Three years from now, we will probably have a lot less cash," he said. Berkshire has been under pressure to invest some of the almost $40 billion that it holds in cash and equivalents

I would never die for my believes, because I might be wrong

---

 

exact 1/30.

WKN: 900567  

Buffett sees more opportunities in Japan, UK
Berkshire chairman sees little value in U.S.
Last Update: 8:25 PM ET May 7, 2006


Omaha, Neb. (MarketWatch) -- Berkshire Hathaway Inc. Chairman Warren Buffett said Sunday that he will likely be making more investments in U.K. and European companies during the next year, and would consider acquisitions in Japan.
Buffett also said there are few bargains among big U.S. companies.
He described the U.K. market as a "fertile field," but said rules requiring investors to make their holdings public if they own more than 3% of a company is a drawback for Berkshire, which usually takes big stakes when investing.
"One of the things we don't like about the U.K. is that we have to report 3% publicly," he said. "That's a mild negative from our standpoint and makes accumulation more expensive."
Still, Buffett suggested Berkshire will invest more in the U.K. and Europe. "I'd be surprised if you didn't see reports on U.K. or other European companies in the next year or so," Buffett said.
As Buffett looks to put some of Berkshire's $40 billion cash pile to work in more, big acquisitions, he's increasing looking outside his usual U.S. hunting ground.
On Friday, Berkshire announced the acquisition of an 80% stake in Israeli toolmaker Iscar Metalworking Cos. for $4 billion. It the first company Berkshire has purchased that's based outside the U.S.
On Sunday, Buffett said he hoped the Iscar purchase would encourage other overseas companies to contact Berkshire about acquisitions.
"We'd love to hear from good sized businesses anywhere in the world," he said. "If we can find businesses of size that meet the same kind of tests that we apply in the U.S., we're more than happy to take a look."
Japan was another country that Buffett singled out for possible acquisitions, partly because a recent increase in shareholder activism there might encourage owners to sell to Berkshire, he said.
"I have hopes of doing something in Japan," he said. "We negotiated on one large deal a while back that didn't come to fruition."
Still, Berkshire Vice Chairman Charlie Munger was more subdued about Berkshire branching out more abroad.
"The fact that we've bought Iscar does not mean we will go running through Europe buying everything in sight," he said. "It does indicate we're willing to do something we haven't done before at a moment's notice."
Buffett hinted Saturday that Berkshire Hathaway Inc. will be making more acquisitions outside the U.S. in the wake of the Iscar purchase.
"You will probably look back on this in five or 10 years as a very significant event in Berkshire's history," Buffett said.
Buffett also said the company has a possible $15 billion acquisition idea, a deal which would put a big chunk of its huge cash pile to work. Buffett said, though, that it was a "low-probability" idea. He didn't say whether it involved a U.S. or non-U.S. company.
Dollar hedge
Buffett said he plans to visit Israel later this year, to visit Iscar headquarters, and also to "see if there are any other pearls like you out there."
Iscar itself may be able to make interesting acquisitions in coming years, he said.
While Berkshire hasn't acquired any overseas companies, Buffett has invested in shares of companies based outside the U.S., such as PetroChina.
Part of this strategy is tied to Buffett's increasing concern about the U.S.'s growing trade imbalances and their potential to weaken the U.S. dollar. In 2002, he increased Berkshire's bets against the dollar and more recently he invested more money in overseas assets to hedge against a decline in the greenback.
As the dollar climbed in 2005, Buffett's positions cost Berkshire almost $1 billion. But so far this year, the dollar has fallen again, giving back about half its gains from last year.
The investments were "intended to hedge our assets from a falling U.S. dollar, but lots of people have missed this, thinking instead that this is market speculation," Thomas Russo, a partner at Lancaster, Pa., investment firm Gardner Russo & Gardner, said earlier this week. Russo is a Berkshire shareholder.

 

Last Update: 7:52 PM ET May 7, 2006


OMAHAZ, Neb. (MarketWatch) -- Warren Buffett said Sunday that he would like his son Howard to become non-executive chairman of Berkshire Hathaway Inc. after the elder Buffett dies or steps down from leading the insurance-focused conglomerate.
While noting that it was up to Berkshire's board of directors to decide who would replace him, Buffett said his son could take on a non-executive role as chairman while another person takes over as chief executive. "The idea would be that he would be a totally non- executive chairman with no pay," Buffett said during a press conference a day after Berkshire Hathaway's annual shareholder meeting. "The only reason for him to be there would be as a double-protector of the Berkshire culture."
With Howard Buffett as non-executive chairman, it "would be easier to facilitate change" if a new chief executive unexpectedly tried to change Berkshire's culture, Buffett added.
Howard Buffett, who is president of an agricultural business called Buffett Farms and a photographic and printing company called BioImages, is already a director of Berkshire.
Investors have become increasingly focused on who might succeed Buffett, who at 75, still oversees Berkshire's sprawling collections of businesses and investments with his older partner Charlie Munger.
In his letter to shareholders this year, Buffett went further than he has done in the past to reassure shareholders about what will happen when the time comes for him to step down.
Berkshire's board of directors, strengthened by the addition of Microsoft's Bill Gates, has discussed three in-house candidates to replace Buffett and has unanimously agreed on one person, Buffett explained, without identifying the executives.
Buffett also stressed that the board has strict instructions to make him step down if his abilities being to wane but he refuses to accept this.
"Some managers remain effective well into their 80s ... and others noticeably fade in their 60s," Buffett wrote. "When their abilities ebb, so usually do their powers of self-assessment."
"Someone else often needs to blow the whistle," he added. "When that time comes for me, our board will have to step up to the job."
In the past, Buffett has told investors to trust him and said there was a plan in place, but didn't provide much detail.