Buffett Purchase Labeled a “Classic Opportunity”
Warren Buffett's Berkshire Hathaway Inc. holding company has announced its latest purchase, one that not only will diversify the company but may also position it for a rebound in the U.S. economy amid the distressed housing market.
On Christmas Day, Berkshire announced a $4.5 billion agreement with the Pritzker family of Chicago to purchase 60 percent of Marmon Holdings Inc, which makes such things as railroad tank cars, plumbing pipes, metal fasteners, and wiring and water treatment products used in residential construction.
The remainder of Marmon would be purchased by Berkshire by 2014, for a price based on future earnings. The purchase is Berkshire's largest acquisition outside insurance, which includes auto insurer Geico Corp and reinsurer General Re Corp.
"Marmon is a classic Buffett opportunity," said Frank Betz, a principal at Carret/Zane Capital Management LLP in Warren, New Jersey, which invests $800 million and owns Berkshire stock. "Many of its businesses dovetail into worldwide requirements for infrastructure, where American industry will be a long-term beneficiary."
Published on December 27, 2007
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