Berkshire News Briefs - 7/7/18

Warren Buffett is big winner after US bank stress tests

Warren Buffett’s Berkshire Hathaway is poised to net about $1.7bn in dividends after Wells Fargo and other banks in which he is a shareholder sailed through the Federal Reserve’s annual stress tests. [...]

Berkshire is one of the biggest single investors in the financial sector globally. It is the number one shareholder in lenders including Wells, Bank of America and American Express, and has sizeable stakes in several others. [...]

Amazon-Berkshire-JPMorgan Health Venture Takes Aim at Middlemen

The health venture established by Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co. will take aim at intermediaries in the health-care system as a part of a broad effort to reduce wasteful spending, the venture’s newly named chief executive officer said.

The still-unnamed business will initially seek to develop ways to improve care for the more than 1 million individuals who get health insurance from the three firms. Over time, the venture will make those innovations available freely to other companies, meaning that if it’s successful, its effects could be felt more broadly among the more than 150 million people in the U.S. who get their health insurance through work. [...]

Warren Buffett hands reins of World-Herald, other Berkshire Hathaway newspapers to Iowa firm Lee Enterprises

As the newspaper industry navigates a decline in print circulation and advertising revenue, hometown owner Warren Buffett is assigning the fate of his own BH Media Group to an out-of-town company.

Lee Enterprises of Davenport, Iowa, will manage The World-Herald and the 29 other Berkshire Hathaway-owned daily newspapers, the companies announced Tuesday in a five-year agreement that could bring Lee $50 million over five years.

Berkshire Hathaway's Acquisitive Clayton Lands Arbor Homes

After an 18-month courtship, Maryville, Tenn-based Clayton Properties Group closed on the acquisition of Indianapolis' No. 1-ranked home building firm, Arbor Homes, adding to its 8-state map a 24-year old private builder whose signature stock in trade is a rarity these days: the profitable below-$200,000 site-built home.

The 7th regional site-build jewel in the Clayton crown adds to its suddenly hefty portfolio of regional firms--on pace to deliver as many as 4,500 homes in 2018--gives the Berkshire Hathaway unit fresh headway and a platform to launch further inroads in its goal to provide people priced out of many housing markets with an attainable path to homeownership. [...]

BNSF estimates 230,000 gallons of oil spilled in NW Iowa

Iowa Gov. Kim Reynolds visited Saturday to authorities assigned to clean up 230,000 gallons of oil that spilled Friday morning into the Little Rock River near Doon in northwest Iowa.

The spill was caused by a derailed BNSF train. [...]

The company reported later Saturday that about 100,000 gallons of the 230,000 gallons of spilled oil had been contained, and that oil would be removed from the immediate area with oil-water separators. [...]

How Warren Buffett and Bill Gates ended up walking into an Old Market store

Warren Buffett and Bill Gates didn’t just wander into an Old Market nostalgia store the day after the Berkshire Hathaway shareholders meeting in May, with “Little Brown Jug” playing in the background.

No, some of Gates’ staffers had been to Omaha in the past and were fascinated by Larry Richling’s Fairmont Antiques & Mercantile store/Hollywood Candy, 1209 Jackson St., and its combination of candy store, memorabilia collections, soda fountain and more.

The Gates group decided that it would be just the place for an episode of Gates’ video blog, showing the two friends having a good ‘ol time in Omaha. [...]

Berkshire News Briefs - 6/20/18

Buffett, Bezos, Dimon appoint Dr. Atul Gawande as CEO of their newly formed health-care company

Dr. Atul Gawande will lead the joint health-care venture between Amazon, J.P. Morgan and Berkshire Hathaway, the three companies announced Wednesday.

Berkshire Hathaway CEO Warren Buffett, J.P. Morgan CEO Jamie Dimon and Amazon CEO Jeff Bezos announced a partnership in January to tackle rising health-care costs.

They will form a new company for the venture, which will be headquartered in Boston, a hub for biotechnology and medical research. It will be "free from profit-making incentives and constraints. [...]

USG takes $7 billion offer from Knauf after spurned advances

Sheetrock maker USG Corp accepted a $7 billion cash offer from German construction products maker Gebr Knauf KG on Monday after three months of back-and-forth negotiations that began when longtime USG shareholder Warren Buffett teamed up with the German bidder to sell his stake.

The companies agreed to a $44 per share deal, a bump from the $42 initially offered by the private German family-owned company in late March. Buffett’s Berkshire Hathaway Inc had a 31 percent stake in USG and has said previously it would offload its stake. [...]

The Berkshire Hathaway investment dates back to 2001, when Buffett helped the company out of bankruptcy with a loan that was later converted to a stake in the company’s equity so large that a wholesale acquisition of the entire company remained one of the few ways for Berkshire to exit the investment without pushing down the share price. [...]

Buffett, Dimon urge end to quarterly profit forecasts

Investor Warren Buffett and JP Morgan Chase CEO Jamie Dimon are encouraging public companies to stop predicting their quarterly earnings and focus on long-term goals.

The two executives said on CNBC Thursday that companies that focus on hitting their quarterly numbers may do things that hurt them in the future, such as delaying investments or changing when certain gains are recorded. [...]

Grainger Is Caught Between an Amazon and a Buffett

[...] Intriguingly, Grainger may now have other competition via Warren Buffett's Berkshire Hathaway Inc., which last year acquired Production Tool Supply. The deal wasn't publicized, but the company has since used it to launch Berkshire eSupply, a wholesale service business that aims to provide smaller distributors with access to e-commerce platforms, fulfillment services and a greater product offering than they’d otherwise be able to support. [...]

Warren Buffet visits metro to announce new GEICO service center, 500 new jobs in Lenexa

Warren Buffett is bringing what he calls his favorite company to [the Kansas City metro area]. GEICO Insurance will open a service center in Lenexa, bringing 500 jobs.

Kansas Gov. Jeff Colyer and billionaire CEO Warren Buffett joined representatives from the city of Lenexa, Johnson County and Geico on Tuesday morning to make the announcement. [...]

Lenexa city leaders said the city did not offer any financial incentives to lure GEICO but said the state did offer some incentives. [...]

Warren Buffett helps Israel sell $80 million in bonds at Omaha dinner

Warren Buffett hosted a dinner in Omaha this week for investors who bought $80 million worth of Israel Bonds, a source of revenue for a country where Berkshire Hathaway Inc. has a major investment.

The dinner at the Fred & Pamela Buffett Cancer Center was the second time Buffett has helped the Israeli group, the Development Corporation for Israel, formed in 1951 to raise money to build Israel’s economy. Since then, the bonds have raised about $41 billion.

Giving it Away: The Other Buffett Family Business

[...] Now 64 with two grown children, Susie Buffett has a more-than-full-time day job. Her Sherwood Foundation, formerly known as the Susan A. Buffett Foundation, gave away $141 million in 2016, according to the most recent IRS filing, funding dozens of nonprofit initiatives in education, social justice, and poverty alleviation. That’s everything from a local ballet company to Big Brothers/Big Sisters to a black police-officers group to Omaha’s Bike Union—and those are just the Bs. Each of these groups is carefully evaluated before the first check is cut. “I don’t want to come off like I’m complaining,” Buffett says. “I am grateful beyond words for what we get to do. But it’s not so easy to try to do it well, and we are trying to do it well.” [...]

Two billionaires walk into an Omaha Dairy Queen. A blizzard of excitement ensues

Omaha did a double-take when folks there spotted Warren Buffett and Mark Cuban eating lunch Monday in Buffett's hometown at the Dairy Queen near 72nd and Q streets. [...] Cuban, the owner of the Dallas Mavericks, memorialized his trip to the land of Dilly Bars on his Instagram, where he shared a photo of the two men. [...]

The Omaha World-Herald got the scoop on at least one topic that came up over lunch — basketball. [...] Buffett's office would not disclose what else the two men talked about, the newspaper reported. [...]

Berkshire News Briefs - 2/3/18

Amazon, Berkshire Hathaway, and JPMorgan are creating a new healthcare company to tackle the 'hungry tapeworm' of rising costs

Amazon, Berkshire Hathaway, and JPMorgan Chase are creating a new business designed to lower healthcare costs for US-based employees in a move that could shake up the managed-care industry.

The companies were not specific about what kind of enterprise they aim to create, noting only that they wanted to improve employee satisfaction while reducing costs, according to a joint release. Still, the news was enough to send shares of managed-care providers lower. [...]

Berkshire Hathaway Utility Unit Shuffles Top Executives

Berkshire Hathaway is shuffling the executives in charge of its utility unit after promoting Greg Abel to oversee all of Berkshire's non-insurance businesses.

Abel's promotion to vice chairman of Berkshire Hathaway was announced Wednesday. Following that move, Berkshire promoted MidAmerican Energy CEO William Fehrman to replace Abel at Berkshire Hathaway Energy. [...]

Berkshire Hathaway Energy includes MidAmerican, PacifiCorp, NV Energy and several other utilities.

With Fehrman moving up to oversee Berkshire Hathaway Energy, Des Moines, Iowa-based MidAmerican promoted Adam Wright to be its new CEO. [...]

Ajit Jain Reports $109 Million Stake in Berkshire Hathaway

One of Warren Buffett’s top deputies has amassed a stake in Berkshire Hathaway Inc. valued at more than $100 million.

Ajit Jain, the insurance executive who was named a vice chairman of Buffett’s conglomerate earlier this month, disclosed the holdings in a regulatory filing on Thursday. A large portion of the stake is held by a foundation and trusts in his family’s name, and his wife also owns some of the shares. Jain directly controls about $22 million of the stock. [...]

Potential Buffett Heir Reveals What May Be Just the Start of His Berkshire Stake

[...] A regulatory filing on Friday shows Abel indirectly holds about $2.1 million of stock in the Omaha, Nebraska-based company. But a separate disclosure last year noted an agreement that could catapult his holdings higher. That filing showed he could convert a stake in Berkshire’s energy business into more than $400 million of stock in the conglomerate.

The new filing was triggered by his promotion last week to vice chairman for non-insurance operations at Berkshire, a position that will put him in charge of businesses ranging from BNSF Railway to Dairy Queen. [...]

Warren Buffett’s Berkshire Hathaway had an amazing 2017. 2018 isn’t looking too bad, either.

[...] The Jain and Abel ascension followed a momentous 2017 for Berkshire Hathaway that saw the company’s “A” shares break $300,000 per share. It closed at $320,000 on Thursday, but you can still buy the Berkshire “baby B” shares for $213.

Also last year, Berkshire’s cash-on-hand surpassed $100 billion as Buffett/Munger scurried to find new investments. The Republican tax plan that became law late last month gifted a one-time, $37 billion windfall to Berkshire shareholders, which helped raise the stock price.

Not least of all, Buffett won a $1 million, decade-old bet with a hedge-fund bigwig. Buffett said he could do better than a portfolio of hedge funds by investing in boring, index fund over 10 years. Buffett gave the money to Girls Inc., one of his favorite charities.

So where does Berkshire Hathaway go from here? [...]

Iscar Wants to Expand Galilee Factory, but It Can’t Find Workers

Iscar, the Israeli maker of machine tools owned by U.S. billionaire investor Warren Buffett, wanted to build an additional plant at its headquarters in the Galilee town of Tefen. Eli Cohen, the minister of economy and industry, was there to help with an offer of a 50-dunam (12.5-acre) site at no cost.

Cohen wanted to ensure that as Iscar grows, it grows in Israel, rather than just overseas. But it doesn’t look like the plant will be built after all, and that’s because there aren’t enough skilled workers to hire, sources close to the company told TheMarker. [...]

New headquaters, expanding workforce at Guard

Berkshire Hathaway Guard Insurance, having moved its headquarters to downtown Wilkes-Barre’s Public Square, is now in the process of filling about 170 jobs it says have been made possible by the move.

The project, which began late last year, is well underway with many departments having moved to the building at 39 Public Square, which Westguard Insurance Co. purchased for just over $5 million in November, according to Guard officials. [...]

GUARD’s annual sales have grown sixfold to approximately $1.2 billion since 2007, and the insurer had run out of space for its more than 675 employees, most of them working in five different spots in the downtown.

Wilkes-Barre, wanting to retain the company, facilitated a $1 million Local Share Account grant to help the project. The state added another $855,000 grant. [...]

Your Next Running Shoes Will Be Custom-Built for You

[...] biomechanical assessment, part of a service and philosophy that Brooks calls Run Signature, has long been in use by the company to help guide its customers to the best-fitting shoe in its arsenal. But the options so far have been limited to what Brooks can sell off the shelf.

Now Brooks, the top brand in specialty running with 25% of the shoe market, according to the NPD Group, wants to take that a step further. The company is working with tech stalwart HP to marry a runner’s gait information with a three-dimensional foot scan generated by HP’s new FitStation device. HP’s technology can measure pressure along the foot as it lands in each stride. The data help Brooks determine how much polyurethane to inject in a shoe’s sole to achieve the right density for as many as 30 zones of your foot.

At a time when Adidas, Nike, and other sportswear companies limit footwear customization to color and material, Berkshire Hathaway–owned Brooks seeks to create running shoes with customized performance elements as well as build data-rich digital customer profiles. [...]

Philanthropist Susie Buffett to help launch Navy's newest littoral combat ship into fleet

The Navy's newest Independence-class littoral combat ship will join the nation's fleet Saturday with a commissioning ceremony in San Diego, and the future USS Omaha has close ties to the family of Berkshire Hathaway Chairman and CEO Warren Buffett.

Susie Buffett, an Omaha philanthropist and the billionaire's daughter, is serving as the ship's sponsor. [...]

Warren Buffett is expected to attend along with other prominent leaders from Nebraska. [...]

Back in 2015, she formally christened the future USS Omaha at the Austal USA shipyard in Mobile, Alabama, with a bottle of bubbly. [...]