Buffett begins European journey

Billionaire Warren Buffett yesterday met business owners in Frankfurt as he looks outside the United States for acquisitions to spur profit growth at his $200 billion Berkshire Hathaway Inc.

The world's wealthiest person, starting a four-city European tour in Germany's financial capital, is seeking to form relationships that may lead to purchases by his Omaha, Nebraska-based investment and holding company.

"If you have a great business, it's best to not sell it," Buffett told reporters at the Berkshire annual meeting in Omaha earlier this month. "But when the time comes, whether for taxes or siblings, we want to be the first ones they think of."

Berkshire has $35 billion in cash and Buffett, 77, has been looking for places to put it. He's invested in China, Israel and the United Kingdom, complaining that there's a dearth of US investment opportunities for a company as large as Berkshire.

Buffett's trip includes meetings in Lausanne today and Madrid tomorrow, finishing in Milan on Thursday. The visit was arranged by Eitan Wertheimer, president of Israel's Iscar Metalworking Cos - acquired by Berkshire in 2006 in Buffett's first non-US purchase - and Angelo Moratti of the family-run Italian energy company Saras SpA.

Buffett owns about a third of Berkshire, which he built over four decades from a failing maker of men's suit linings into a company with businesses that range from candy-making to insurance and a $72.6 billion stock portfolio.

He's known for buying well-run, privately held companies with high barriers to would-be rivals, cutting deals on a handshake and not meddling in management. In exchange, he typically pays less than companies could receive in an auction.

Germany is fertile ground for Buffett's investment style because about three-quarters of companies there are family-run. Many were founded as the nation rebuilt after World War II and are now grappling with succession issues as their founders age.

"Many families go through certain stages of strategic decision-making and they need to know their options," said Iscar's Wertheimer, 56, whose company was founded in 1951 by his father.

Agencies

(China Daily 05/20/2008 page21)