Where will Buffett find his next blockbuster deal? | FT


These days, Warren Buffett likes to say he’s
on the hunt for elephant-sized acquisitions. But the Oracle of Omaha has had trouble finding
multibillion-dollar deals that move the needle for his investment company Berkshire Hathaway. And that is a problem when you have a big
cash pile sitting on your balance sheet. Shareholders may worship Buffett and his co-partner,
Charlie Munger, but at some point they will demand some of that money back either via
share buybacks or dividends. Buffett has argued that his long-term track
record of outperformance against the S&P 500 speaks for itself. Investors should be patient,
he says. The good news for Buffett is that one opportunity
has already fallen into his lap this year. Berkshire pledged $10bn to buy preference
shares in Occidental Petroleum. The Texas oil group needed financing to back
its $55bn takeover of rival Anadarko Petroleum. That would help it win a bidding war for Anadarko
against larger rival Chevron. It was the first big Berkshire deal in a while, But even at $10bn, it’s not as big as Buffett
would like. The last truly big Berkshire takeover came
in 2016, when Buffett’s group spent $37bn to purchase industrial goods company Precision
Castparts. It hasn’t all been smooth sailing for Berkshire
in big deals. It backed a 2013 takeover of US condiments
group Heinz and later combined it with Kraft Foods to create a major US foods group in
2015. Two years later, Kraft Heinz tried to take
over Anglo-Dutch group Unilever for $143bn. But it had to back out after its approach
was publicly rebuffed. Warren Buffett, after all, doesn’t like
to be associated with hostile deals. Since the Unilever bid, Kraft Heinz has struggled. Recently it had to make a $15bn writedown
and even Buffett had to admit that he overpaid when combining Kraft with Heinz. So where will Buffett look next? Brexit Britain,
where many companies could face an uncertain future, may be one place where Berkshire sees
value. In an interview with the FT, Buffett said
he is ready to buy something in the UK tomorrow.

, , , , , , , , , , , , , , , , , , ,

Post navigation

4 thoughts on “Where will Buffett find his next blockbuster deal? | FT

  1. Thank you for posting.
    My, now belated, dad used to tell me:
    "Money isn't worth the paper it's printed on"
    šŸ’°šŸ’øšŸ’·šŸ’¶šŸ’µšŸ’“
    And he also said, regarding gold and the NYSE gold market in general:
    "Never buy gold no matter what!"
    šŸ“ˆšŸ˜ šŸ§
    "It can't feed you, can't clothe you, and it can't shelter you".
    šŸš
    "A real gold brick is so heavy and fragile, it would take delicate hands, and about 25 strong men to lift it.
    šŸ’ŖšŸ™‡ā€ā™‚ļøāš–
    He said real 24k gold bends far too easy and breaks too.
    He read a ton of books, education was unaffordable during the Great Depression era.
    šŸ˜•
    Anyway,
    How are those bitcoins coming along Mr. Buffett?
    šŸ˜²
    (I miss my dad) 1920-2000
    Thank you for reading. šŸ“š
    Love
    From Michigan
    USA šŸ‡ŗšŸ‡ø
    Peace āœŒ

Leave a Reply

Your email address will not be published. Required fields are marked *