lathinker Posted February 24, 2015 Share Posted February 24, 2015 As the recent acquisition proves and Buffett has stated, Berkshire is hungry to buy good European businesses. Buffett has cracked "Code Germany", so there may be more to come. I wanted to ask people (in particular the European members of this forum) if they have an idea which businesses might fit for Berkshire, both listed and unlisted. Most people will know the definition BRK target: wide and lasting moat, high return on capital, industry he can understand. Maybe the discussion results in some actionable investment ideas. A few starters from Germany: Listed: - Fuchs Petrolub - German version of Lubrizol - Rational - kitchen equipment - Pfeiffer Vacuum - special machines (vacuum pumps) - Henkel - cosmetics - Beiersdorf - cosmetics - Fielmann - Glasses/lenses - Axel Springer - media/newspapers Unlisted: - Haribo - iconic candy/sweets - Bertelsmann - media - Fischerwerke - screws, screw anchors,... - Aldi/Lidl - supermarkets Also, a reading recommendation on German "Hiden Champions" for those looking to understand better how these companies operate: http://www.amazon.de/Hidden-Champions-Twenty-First-Century-Strategies/dp/0387981462 Link to comment Share on other sites More sharing options...
rb Posted February 24, 2015 Share Posted February 24, 2015 Very good list Lathinker. For Henkel don't forget their massive construction and industrial adhesive business. Henkel will be a really nice elephant for BRK to have if they can get it at the right price. A few names I would like to add to the list: Listed -Norma Group - Joining products -Symrise - specialty chemicals -Brenntag - chemicals distribution Private -Schluter Systems - construction materials Link to comment Share on other sites More sharing options...
Charlie Posted February 24, 2015 Share Posted February 24, 2015 Listed Lindt & Sprüngli - confectioney Unlisted Ferrero - confectionery Coppenrath Wiese - confectionery Dr. Oetker - cooking Link to comment Share on other sites More sharing options...
Guest longinvestor Posted February 24, 2015 Share Posted February 24, 2015 RWE. Link to comment Share on other sites More sharing options...
Jurgis Posted February 24, 2015 Share Posted February 24, 2015 BRK never bought cosmetics companies and somehow I doubt they will start now. It's a good area, but possibly not something Buffett feels to be within his circle of competence? (I doubt he considered PG or JNJ to be cosmetics companies). I really doubt that BRK will reenter media/newspapers. I think that Buffett is out of that for forever. I also really doubt that BRK would buy supermarkets. I think Tesco has left pretty nasty bruise on that area. Honestly, I also think that Buffett has no edge in clothing: his buys there have been lackluster or failures. But apparently he has not given up on that area. I agree with the rest. Link to comment Share on other sites More sharing options...
Guest longinvestor Posted February 24, 2015 Share Posted February 24, 2015 BRK never bought cosmetics companies and somehow I doubt they will start now. It's a good area, but possibly not something Buffett feels to be within his circle of competence? (I doubt he considered PG or JNJ to be cosmetics companies). I really doubt that BRK will reenter media/newspapers. I think that Buffett is out of that for forever. I also really doubt that BRK would buy supermarkets. I think Tesco has left pretty nasty bruise on that area. I agree with the rest. Agree. In fact WEB commented recently (forget where, last AGM?) that he recently learned what he didn't know about retail. Link to comment Share on other sites More sharing options...
lathinker Posted February 24, 2015 Author Share Posted February 24, 2015 Buffett has rightly said that retail is incredibly tough, but on the other hand Berkshire owns See's, Borsheim, Nebraska Furniture Mart (he might like IKEA if it was for sale ? ;) ) . Berkshire has been a long term investor in Wal-Mart. So it would be wrong to say they don't do retail. As for "cosmetics", let's rather say strong-brand consumer goods. Berkshire did own Gillette and does own Coca Cola. Link to comment Share on other sites More sharing options...
gfp Posted February 24, 2015 Share Posted February 24, 2015 Berkshire did recently offer preferred equity financing for Coty's offer for Avon - so he isn't completely averse to cosmetics if someone else is running it. I don't remember the terms and the deal didn't go anywhere, but perhaps it was very lucrative financing and nothing more. http://dealbook.nytimes.com/2012/05/10/in-backing-cotys-bid-for-avon-buffett-takes-unusual-step/?_r=0 Link to comment Share on other sites More sharing options...
Txvestor Posted February 25, 2015 Share Posted February 25, 2015 I think Avon could actually be reinvigorated under BRKB ownership. With Cool running maybe? What a train wreck it has been for the past few years though. I'm frankly surprised another approach hasn't been made. Link to comment Share on other sites More sharing options...
rb Posted February 25, 2015 Share Posted February 25, 2015 From what I remember of that deal, they got outbid and WB didn't follow up due to valuation reasons. Oh, and Cool wasn't around back then. Link to comment Share on other sites More sharing options...
Charlie Posted February 25, 2015 Share Posted February 25, 2015 http://finance.yahoo.com/news/buffett-sets-sights-german-companies-095117269.html Buffett sets sights on German companies Reuters BERLIN, Feb 25 (Reuters) - Renowned U.S. investor Warren Buffett is readying for an acquisition spree in Europe's biggest economy after setting the ball rolling last week with the purchase of a niche German retailer by his Berkshire Hathaway holding company. In an interview with Handelsblatt newspaper on Wednesday, Buffett said that he liked German companies because of the regulatory and legal protection for investors, as well as the global reach of even smaller businesses, such as Detlev Louis Motorrad-Vertriebs, the motorcycle apparel and accessories retailer bought last week. "We are definitely interested in buying more German companies," told the newspaper. "Germany is a great market: lots of people, lots of purchasing power and Germans are productive. We also like the regulatory and legal framework." Buffett, who said he is ready to pay cash for good German companies, said the euro's weakness was only one factor for the decision to ramp up investments in Germany. "The bottom line is that the weak euro is naturally good for acquisitions," he said. "But the euro's exchange rate is not our primary motivation. We simply want to own more good companies in Germany - that's our goal." Asked about past rumours that Berkshire Hathaway was interested in buying German sweet maker Haribo and printing press manufacturer Heidelberger Druckmaschinen, he said: "Sometimes there are reports that we're interested even though it's not true. But if you can arrange a transaction, I'd pay you a fee." Berkshire Hathaway agreed to buy Detlev Louis for a little more than 400 million euros ($456 million). (Reporting by Erik Kirschbaum; Editing by David Goodman) Cheers! Link to comment Share on other sites More sharing options...
CorpRaider Posted February 25, 2015 Share Posted February 25, 2015 From what I remember of that deal, they got outbid and WB didn't follow up due to valuation reasons. Oh, and Cool wasn't around back then. Avon declined to engage in discussions even after COTY (backed by BRK) raised bid to $24, if memory serves. The AVP board had a new spiffy CEO from JNJ, who was probably thrilling them with tales of a turnaround to come, so one can somewhat understand. Bart Becht is running Coty directly currently and both Coty and AVP cited good performance of their strategic partnership in Brazil in the most recent quarter (basically, as I understand it, plugging COTY products into AVP distribution). Disclosure: Long AVP. Link to comment Share on other sites More sharing options...
gfp Posted February 25, 2015 Share Posted February 25, 2015 Sorry for slightly off-topic, as this is not really a European business - but Exor / Agnelli family is selling Cushman & Wakefield, which would probably be a good fit for either Berkadia or stuck in adjacent to HomeServices. http://www.wsj.com/articles/cushman-wakefield-going-up-for-sale-1424820846?mod=WSJ_hp_LEFTWhatsNewsCollection Link to comment Share on other sites More sharing options...
Guest longinvestor Posted February 25, 2015 Share Posted February 25, 2015 Sorry for slightly off-topic, as this is not really a European business - but Exor / Agnelli family is selling Cushman & Wakefield, which would probably be a good fit for either Berkadia or stuck in adjacent to HomeServices. http://www.wsj.com/articles/cushman-wakefield-going-up-for-sale-1424820846?mod=WSJ_hp_LEFTWhatsNewsCollection Wonder how much Berkshire / HomeServices paid for all of the US real estate brokerages that they now own but acquired during their crisis era buying spree? The above report mentions a deal could fetch $2 B for the Italian family's 81% stake in C&W. Link to comment Share on other sites More sharing options...
rb Posted February 25, 2015 Share Posted February 25, 2015 Wonder how much Berkshire / HomeServices paid to own all of the US real estate brokerages during their crisis era buying spree? You can probably work it out using BRK's ARs and MidAmerican regulatory filings. Link to comment Share on other sites More sharing options...
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