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Buffett Shopping For Family-Owned Businesses In Europe

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The Associated Press

The Tampa Tribune

Published: May 20, 2008

FRANKFURT, Germany - Warren Buffett, whose business and investment acumen has made him one of the world's wealthiest men, embarked on a European "deferred shopping tour" Monday, looking for possible acquisitions for Berkshire Hathaway Inc.

Starting in Frankfurt, continental Europe's financial hub, the 77-year-old chairman and chief executive of Berkshire said he wanted to put his company "on the radar screens" of German family-owned businesses should they consider selling.

"You want to fish in a pond where there's fish. Europe is a much better pond," Buffett said on his decision to visit Europe instead of emerging-market countries.

He said the wish list was for long-term investments in durable, competitive companies that have the potential for a good return on capital and a trusted management team in place.

"We're looking for companies that have at least $50 million to $75 million in pretax profit. The bigger the better," Buffett said without elaborating. "I know you want names, but you won't get any."

Buffett, whose family ran a grocery store for 100 years until 1969 in Omaha, Neb., said any company can be faced with having, or wanting, to sell.

"It would be a good choice for them to contact us if they wanted to," he said, noting that Berkshire Hathaway probably could preserve the quality of those companies.

He said family companies often had a much longer planning timeframe, don't have to answer to shareholders or Wall Street, and could be more in line with Berkshire's strategy. Buffett said he hoped the phone would start ringing.

He said his company had no plans to buy the Royal Bank of Scotland's insurance operations.

Buffett said his trip to seek out opportunities among Europe's biggest family-owned companies will include stops in Switzerland, Spain and Italy.

Omaha-based Berkshire has about $35 billion in cash and is looking to invest. Berkshire's subsidiaries include insurance, clothing, furniture, natural gas, corporate jet and candy companies. Berkshire also has major investments in such companies such as Coca-Cola Co. and Anheuser-Busch Cos.

Buffett said he wouldn't let the weak dollar - which would make European companies more expensive - deter him.

"I'm not going to pass up something because currency is too high or too low. The good opportunities are few and far between," he said.

This week's trip includes meetings in Lausanne today and Madrid on Wednesday, wrapping up with a visit to Milan on Thursday.

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