Warren Buffet announced that the company he runs, Berkshire Hathaway, is shopping for a big acquisition (anywhere between $30-$60 billion depending on what you read) and there is much speculation on what he is going to buy. The added twist is that Buffet has recently begun to buy outside of the United State market (for example, Berkshire Hathaway owns a part of PetroChina Company Limited). This has lead some to believe that Buffet is going to buy something outside of the United States. Given what we know about the Warren Buffet style of investing, it won’t be trendy, it won’t be tech and it won’t be an up and coming company. Buffet likes to invest in what he knows: insurance, utilities and infrastructure to name a few sectors.
As a purely speculative guess, what would stop Buffet from buying a Canadian company with a large international presence who are market leaders in their industry? What about Manulife Insurance, SNC-Lavalin or Thomson Corporation? It appears that the Canadian government is taking a rather hands-off approach on international companies buying up resource companies so I am not sure that regulatory barriers are as prevalent as they use to be.
Love to hear what you think Buffet will invest in.
May 9th, 2007 at 11:45 am
Maybe a company I’ve been looking at myself — Caterpillar.
C construction firm with A market cap around $50-billion, (U.S.) Berkshire could almost do the deal purely in cash. They have steady earnings growth year after year, and 50% of their revenues come internationally. They do have a fair amount of debt, but the annual revenues are staggeringly high. Plus that seems like a bricks-and-mortar industry Buffett would like.
Just a thought.
May 9th, 2007 at 4:00 pm
Funnily enough, Business Week made the same predication in addition to Ikea!
May 14th, 2007 at 1:01 pm
I hadn’t read that. But what can I say — great minds think alike…
May 15th, 2007 at 8:52 pm
actually, it was reported that he’s buying foreign currencies. since he’s a value investors there’s a good chance he’s buying the chinese, indian or japanese currency.