Buffett su Marmon:
In a live interview this morning on CNBC's Squawk Box, Warren Buffett called his purchase of a big Marmon stake as a "bet on America over a long time." He also revealed that while he has been approached by financials companies about buying a stake, "we have not seen a deal that causes me to start salivating." A summary appears in the WBW post Warren Buffett tells CNBC He's Been Approached by Financials But Hasn't Seen Anything He Likes So Far.
Here is a video clip and transcript of the complete interview:
Becky: Why Marmon?
Buffett: Well, Marmon is our kind of company, Becky. It's in some very basic businesses, but good businesses. It's got terrific management. It's a chance to do a very big transaction which I like, but there's nothing not to like.
Becky: Well, it's a 125 different businesses. People call that a conglomerate. Add that to Berkshire Hathaway's already huge number of companies out there and people start calling it a conglomerate again. Doesn't that bother you? Because right now the stock market doesn't value conglomerates.
Buffett: That's OK with us. Yeah, you can call us a 'conglomerate-squared' now. (Laughter.)
Becky: 'Conglomerate-squared.' It doesn't bother you what the stock market thinks about it?
Buffett: Well, it's what we are. We think it works pretty well. And the test will not be whether the stock market likes it today or tomorrow. The test will be where the company is in 10 or 20 years.
Becky: You know, Marmon's got operations in China and Europe, but most of all it's a U.S. company. Is it fair to say that this is a bet on American industry?
Buffett: Well, yeah, it's very basic American industry. It's about as basic as it gets. So, it's, ah, it's a bet, it's a very large bet on America over a long period of time.
Becky: You know, you've got 60 percent of the company you're buying right now, but you'll be buying the rest over the next six years. Why did you structure the deal that way?
Buffett: It's the way the Pritzker family wanted the structure. We try to tailor deals to what works best for the seller. In this case, ah, there's a group of sellers, and a number of them certainly want to try to ride on the company over the next six years or so. And that's fine with us. I hope they get paid considerably more for the back end.
Becky: They'll be paid more if the company's earnings increase over the next six years?
Buffett: That's exactly right.
Becky: OK. So jumping into this right now, you've got, again, 125 different businesses that make up the Marmon Group ...
Buffett: Don't give me a quiz on the names, Becky, please.
Becky: I won't quiz you on all 125 names, but it's $7 billion in revenue annually and about 21,500 employees. How does that change the composition of Berkshire?
Buffett: Well, it's adds about 10 percent, almost, to the number of employees we have. Although ... we have about 220,000 before this. But, we have 19 at headquarters. It will not add a person to headquarters. We're not going to go crazy around here. And, in non-insurance revenues, this comes, again, as about 10 percent of the non-insurance revenues of Berkshire. It could move the needle at Berkshire.
Becky: OK, it could move the needle at Berkshire. You've got a history with Jay Pritzker of the Pritzker family, being the ones who put together the Marmon group. You met Jay Pritzker over 50 years ago?
Buffett: I met Jay Pritzker, I wrote about it in the 1988 annual report when I was talking about arbitrage. I met Jay Pritzker in 1955 when I was 24 years old, working in New York City. And my bosses sent me over to Brooklyn on the subway to attend a special meeting of the Rockwood Chocolate Company. And Jay Pritzker, I'd never heard of before (until) just before that event, was there and couldn't have been nicer to me. So I've been a, I became an admirer, I followed him. He's a brilliant guy. And I'm doing this deal with his family.