por admin » Dom Ago 30, 2020 8:15 pm
Warren Buffett’s Berkshire Hathaway buys stakes in Japan’s five leading trading companies
PUBLISHED SUN, AUG 30 20207:41 PM EDTUPDATED AN HOUR AGO
Becky Quick
@BECKYQUICK
Warren Buffett’s Berkshire Hathaway has acquired a slightly more than 5% stake in each of the five leading Japanese trading companies.
Berkshire acquired the holdings in Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co., and Sumitomo Corp. over a roughly 12-month period through regular purchases on the Tokyo Stock Exchange.
Based on Friday’s closing prices for the trading houses, a 5% stake in each would be valued at roughly $6.25 billion.
Berkshire says it intends to hold the investments for the long term, and that it may increase its holdings in any of the companies up to a maximum of 9.9%, depending on price.
Warren Buffett
Warren Buffett
Gerry Miller | CNBC
They say 90 is the new 70, and in Warren Buffett’s case it may be true.
The chairman and CEO of Berkshire Hathaway announced today, on his 90th birthday, that his company has acquired a slightly more than 5% stake in each of the five leading Japanese trading companies. The companies are Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co., and Sumitomo Corp. Berkshire said it acquired the holdings over a roughly 12-month period through regular purchases on the Tokyo Stock Exchange. Based on Friday’s closing prices for the trading houses, a 5% stake in each would be valued at roughly $6.25 billion.
The Japanese trading companies — known as “sogo shosha” — are conglomerates that import everything from energy and metals to food and textiles into resource-scarce Japan. They also provide services to manufacturers. The trading houses have helped grow the Japanese economy and contributed to the globalization of business there. But as they have extended their footprint overseas, they’ve also become more vulnerable to global predicaments, like the financial crisis from a decade ago. The trading houses also face increasing competition from venture capitalists and private equity funds.
For Buffett, the move is no quick trading play. Berkshire says it intends to hold the investments for the long term, and that it may increase its holdings in any of the companies up to a maximum of 9.9%, depending on price. Berkshire also pledged to make no purchases beyond a 9.9% stake in any of the companies unless given approval by the trading companies’ boards of directors.
In describing its intentions for the investment in the trading houses, Berkshire pointed to its history of long-term, passive holdings in companies like Coca-Cola Co., American Express Co., and Moody’s Corp., which each span multiple decades.
“I am delighted to have Berkshire Hathaway participate in the future of Japan and the five companies we have chosen for investment,” said Mr. Buffett, adding that the trading houses have many joint ventures around the globe. “I hope that in the future there may be opportunities of mutual benefit,” he said.
Berkshire also said that despite its large, yen-denominated bet, it would have little exposure to currency fluctuations because it holds 625.5 billion of yen-denominated bonds ($5.93 billion) that will mature at various dates from 2023 through 2060.