In the annual shareholder letter released Feb. 11 by Berkshire Hathaway (NYSE: BRK-B), Warren Buffett announced the need for major acquisitions to help him grow Berkshire’s profits at a “decent rate.” Given the billions in cash Berkshire generates (Buffett estimates $12 billion in annual earnings power) in any given year, Buffett declared his “elephant gun has been reloaded” and that his “trigger finger is itchy” for big acquisitions. His itch was partially scratched, recently when, on March 14, Berkshire announced it would be acquiring specialty chemical firm Lubrizol (NYSE: LZ) for $9 billion in cash and… Read More
In the annual shareholder letter released Feb. 11 by Berkshire Hathaway (NYSE: BRK-B), Warren Buffett announced the need for major acquisitions to help him grow Berkshire’s profits at a “decent rate.” Given the billions in cash Berkshire generates (Buffett estimates $12 billion in annual earnings power) in any given year, Buffett declared his “elephant gun has been reloaded” and that his “trigger finger is itchy” for big acquisitions. His itch was partially scratched, recently when, on March 14, Berkshire announced it would be acquiring specialty chemical firm Lubrizol (NYSE: LZ) for $9 billion in cash and the assumption of $700 million in debt. Buffett said he liked Lubrizol’s global leadership position in several areas, which include its lubricant additives for engine oils and related fuel additives for gasoline and diesel fuel. The buyout price-to-earnings (P/E) ratio is less than 14 based on trailing earnings and will qualify as the fourth-largest acquisition in Berkshire’s storied history. Buffett recently said he was still interested in more acquisitions and isn’t ruling out any sector or area of the world, save for… Read More