Berk­shire's cash nears record as Buf­fet ex­tends ele­phant hunt

The Pak Banker - - Front Page -


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.

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