Berkshire's cash nears record as Buffet extends elephant hunt
Berkshire Hathaway Inc. (BRK/A)'s cash pile climbed to near-record levels in the third quarter as Chairman Warren Buffett extended his search for larger acquisitions.
Cash surged 17 percent to $47.8 billion in the three months ended Sept. 30, Omaha, Nebraska-based Berkshire said in its quarterly regulatory filing Nov. 2. That's $115 million less than the record at the end of June 2011.
Warren Buffett's Berkshire Hathaway Inc. said profit climbed 72 percent in the third quarter on better results from its derivatives book and higher earnings at railroad Burlington Northern Santa Fe.
Buffett, 82, has relied on stock picks and takeovers to build Berkshire over the past four decades into a company valued at more than $200 billion. As the firm increased in size, the billionaire has focused on managing its biggest equity holdings, including stakes in Wells Fargo & Co. and International Business Machines Corp., and finding multibillion-dollar acquisitions.
Berkshire's more recent deals have included a buildinginsulation maker and food-distributor Meadowbrook Meat Co. as Buffett's firm completed so-called bolt-on purchases that cost $1.8 billion in the first nine months of the year. "We do not believe that these acquisitions are material, individually or in the aggregate," to the company's financial statements, Berkshire said in the filing.
Last week, Buffett agreed to acquire party-supply retailer Oriental Trading Co. Berkshire will pay about $500 million, according to a person familiar with the deal who declined to be identified because terms were private.
Berkshire's cash rose after third-quarter net income climbed 72 percent to $3.92 billion as profit advanced at units including railroad Burlington Northern Santa Fe and power provider MidAmerican Energy Holdings Co. The company also had better results in its derivative book. Buffett and his deputies sold about $3.18b in stock in the three months, while buying $1.18b.