Berkshire News Briefs - 10/29/13

Ketchup changeup: McDonald's dropping Heinz after CEO change (Reuters)

McDonald's Corp on Friday said it plans to end its 40-year relationship with ketchup maker H.J. Heinz Co, since that company is now led by Bernardo Hees, the former chief executive of hamburger rival Burger King Worldwide Inc. "As a result of recent management changes at Heinz, we have decided to transition our business to other suppliers over time," McDonald's said in a statement.

Buffett's Berkshire cuts Tesco stake by $485 million (Chicago Tribune / Reuters)

I think the Tesco sale is related to Marmon's IMI purchase... Berkshire keeping UK money in the UK to avoid the tax issues of moving money to and from the US.

Billionaire Warren Buffett's Berkshire Hathaway Inc has slashed its stake in Britain's Tesco by 300 million pounds ($484.75 million), weeks after the world's No.3 retailer posted disappointing half-year results. [...] Berkshire, a Tesco shareholder since 2006, cut its holding to 3.98 percent from 4.98 percent on October 16, filings on the London Stock Exchange website showed. However it still remains one of its biggest investments outside the United States. Berkshire's Marmon Group had announced on the same day that it had agreed to buy two businesses from British engineering company IMI for 690 million pounds.

Buffett: Why I didn't buy the Washington Post (CNN / Fortune)

As the Graham family exits emotionally from the Washington Post newspaper, and new owner Jeff Bezos stays mum about his plans, some fresh details about who did not buy the paper have emerged. Participating in a Q&A last week at Washington's Metropolitan Club, Warren Buffett, 83, spoke of his long-term affection for the paper and said he had "briefly" considered buying it when it went on sale earlier this year. But he then decided the purchase wouldn't work.

MidAmerican Energy Holdings Company Earns No. 1 Spot in Industrial Customer Satisfaction Among U.S. Electric Utility Companies (Business Wire)

MidAmerican Energy Holdings Company ranks No. 1 in the U.S. for overall customer satisfaction among large commercial and industrial customers of electric utility holding companies, according to 2013 data released this week by TQS Research, Inc. The company’s ongoing emphasis on customer satisfaction and sharing of best practices resulted in all three of MidAmerican Energy Holdings Company’s U.S. utilities – MidAmerican Energy Company, Pacific Power and Rocky Mountain Power – contributing to the top ranking. MidAmerican Energy Company, based in Des Moines, Iowa, earned a very satisfied rating of 95.4 percent from the large commercial and industrial customers included in the survey.

Jain feeds Buffett’s hunger (Insurance Insider)

This story is really "inside baseball" about the insurance industry, and very heavy on the metaphor, which you can see from the intro.

People are starting to worry about him. The changes in diet. The idiosyncratic decisions. The silence. He isn't quite the man he used to be, isn't quite himself. Everyone is talking about it: speculating about his motives, glossing his actions, promulgating theories, kvetching about its implications. Which is to say that Ajit Jain, the softly spoken, smiling carnivore par excellence of the reinsurance world has of late taken up omnivorous habits. Where Jain was previously notorious for holding aloof until he scented blood, then attacking ferociously and making off with hefty chunks of red meat in his mouth, the last two years have seen him extend his diet in surprisingly catholic ways.

Willis to Allocate Risks to Insurers Including Berkshire (Bloomberg)

Willis Group Holdings Plc, the third-largest insurance broker by market value, agreed to allocate as much as 25 percent of premiums from the London corporate specialist market to pre-selected insurers. Underwriters in the group include Warren Buffett’s Berkshire Hathaway Inc., People’s Insurance Company (Group) of China Ltd. and Hiscox Ltd., said Colleen McCarthy, a spokeswoman for the London-based broker. [...] Aon Plc, the second-largest broker, announced a similar deal with Omaha, Nebraska-based Berkshire in March to shoulder risks from the Lloyd’s of London market. Berkshire agreed to provide Willis’s clients additional coverage for oil drilling following BP Plc’s 2010 spill in the Gulf of Mexico.

Johns Manville expands micro glass fibre nonwoven capacity in Germany (Innovation in Textiles)

I'm mostly including this link because I don't find opportunities to talk about Johns Manville very often.

Johns Manville, a Berkshire Hathaway company and a leading manufacturer of premium-quality building, specialty and filtration products, has completed an expansion of its micro glass fibre nonwoven production for air filtration media in its plant in Wertheim, Germany. The company’s micro glass fibre nonwovens are used as top-performance media in HVAC filtration applications and also as aircraft insulation. The company also recently announced an additional investment of EUR 32 million in a state-of-the-art PET spunbond line for filtration products at its production site in Berlin.

Also, the nationwide rebranding of "Prudential Real Estate" into "Berkshire Hathaway Real Estate" continues on, with Austin and Kansas City the major markets making the switch in the past week. I gave up on posting all the press releases from all the real estate brokerages and all the small-town newspaper business section stories, but this story is still in progress.

The Buffetts on Charity, Succession, and TV (Bloomberg Video)

Berkshire Hathaway chairman/CEO Warren Buffett, board member Howard G. Buffett and Howard W. Buffett, executive director at Howard G. Buffett Foundation, talk with Betty Liu about their book “40 Chances,” their philanthropic endeavors, succession at Berkshire Hathaway and Warren Buffett’s love of the TV show “Breaking Bad.” They speak on Bloomberg Television’s “In The Loop.”

Warren Buffett shows off his ukulele skills (Today)

"Now, here it is, your moment of zen..."

Warren Buffett — business mogul, investor, philanthropist ... ukulele player? The 83-year-old financial legend stopped by TODAY with son Howard G. Buffett and grandson Howard W. Buffett to discuss their new book "40 Chances" but also showed off his lesser known talents in the Orange Room: singing and playing the ukulele. As if the billionaire doesn't have enough going for him. He said he learned to play in college for an age-old reason. "I play off and on, but I just wanted to impress a girl I was keen on," Buffett said. "It didn't work."

Berkshire News Briefs - 10/21/13

Berkshire Hathaway Subsidiary to Buy U.K. Beverage Business for $1.1 Billion (Fool)

Marmon, a subsidiary of Berkshire Hathaway, today announced it will acquire the beverage dispense and merchandising divisions of IMI plc, a U.K-based engineering firm, for $1.1 billion. After regulatory approval, it is expected the deal will be closed in the early part of next year. [...] The retail dispense business in total has approximately 3,100 employees that will transfer with the acquisition by Marmon. Last year it had revenues of approximately $675 million and operating profit of approximately $100 million. Marmon, which is an industrial subsidiary of Berkshire Hathaway, has approximately 160 manufacturing and servicing business that are independent from one another. It employs 17,000 people had revenues exceeding $7 billion last year.

IMI Sells Dispenser Business to Berkshire for $1.1 Billion (Bloomberg)

IMI’s decision in March to explore options for its soda-pop dispenser, used by Coca-Cola Co., PepsiCo Inc. and McDonald’s Corp., prompted Marmon to make an unsolicited approach, it said today in a statement. Shareholders of the Birmingham, England-based IMI will receive 620 million pounds ($991 million) of the proceeds, with an additional 70 million-pound pension contribution planned. Warren Buffett’s Berkshire will use IMI’s beverage dispensers and mixers, which are also benefiting from growing demand for chilled beers served on tap, to boost the retail and food operations of its Marmon business. IMI chief executive officer Martin Lamb, who is preparing to step down after 13 year in the role, is disposing of the business to fully focus on selling fluid technologies and control systems for chemical plants as well as the oil and gas industry.

Buffett Adds Stocks in Pension Handoff to Lieutenants (Bloomberg)

Billionaire Warren Buffett is betting that his deputy investment managers can find value hiding in a corner of Berkshire Hathaway Inc.: its $10.4 billion in pension assets. Todd Combs, 42, and Ted Weschler, 52, have been building stock portfolios with funds they oversee for defined-benefit plans at Berkshire subsidiaries, including railroad Burlington Northern Santa Fe. The strategy saves Buffett’s company fees it would pay to outside asset managers and could reduce the need for contributions to the pensions. [...] Reallocating pension assets is one way Buffett, 83, can assign more funds to Weschler and Combs without liquidating some of his own long-held investments. [...] The amount of funds the deputies oversee more than doubled to about $5 billion each, the billionaire wrote in March. Combs and Weschler were each hired in the past three years.

Two Brazilian Brothers to Pay Nearly $5 Million in Insider Trading Case (NY TImes)

The bet came on Feb. 13, just a day before Berkshire Hathaway and the investment firm 3G Capital announced a $23 billion takeover of Heinz. The trade went through a Swiss Goldman Sachs brokerage account owned by an entity based in the Cayman Islands. [...] The S.E.C., which acted quickly in February to freeze the assets in the Swiss account, has now amended its complaint to name two Brazilian brothers as the culprits. The brothers — Rodrigo and Michel Terpins — agreed to pay nearly $5 million to settle the charges. Michel Terpins, 36, set the chain of events in motion, according to the S.E.C. After receiving a confidential tip that the Heinz deal was looming, the agency said, he alerted his brother. Rodrigo Terpins, 40, then served as the trader. While vacationing at Walt Disney World in Orlando, Fla., the S.E.C. said, he bought nearly $90,000 in options contracts in Heinz. News of the takeover deal sent Heinz’s shares, and the value of the options contracts, soaring. According to the S.E.C., the brothers’ positions rose nearly 2,000 percent and they reaped over $1.8 million.

MiTek Acquires Kova Solutions, LLC (Business Wire)

MiTek Industries, Inc., a Berkshire Hathaway company , and the world’s leading supplier of advanced engineered structural connector systems, software, equipment and services for the building components industry announced today that it has acquired Kova Solutions, LLC. Kova offers business process and operational management software for residential production builders that integrates and controls the entire business operations with one complete end-to-end system. [...] “The addition of Kova expands MiTek’s software offering very effectively into the builder side of the residential construction market. Kova is a complement to our current SAPPHIRE software offering and a key addition to the MiTek family,” stated Tom Manenti, Chairman and CEO of MiTek.

Benjamin Moore names veteran retailer as CEO (North Jersey News)

Benjamin Moore, the Montvale-based paint maker, has hired retail veteran Michael Searles to be its third chief executive officer in two years, the company said Monday. Searles, 64, who has spent 40 years leading retail companies such as Kids "R" Us, Wilson's Leather and Factory 2-U Stores Inc., replaces Robert S. Merritt, whose departure from the company was announced Sept. 27.

Finishing touch: Benjamin Moore's Newark paint plant reopens following Hurricane Sandy (NJ News)

It has been nearly a year since Hurricane Sandy sent 6 feet of water rushing into the Newark plant from the banks of the Passaic River, damaging or destroying millions of dollars worth of equipment and shuttering the facility. As for the 130-year-old paint maker, recent events have dulled the shine from its premium brand paint. Benjamin Moore, which has less than 10 percent market share, has cut its workforce by 15 percent in recent years, and this month hired its third chief executive in two years. The news was brighter last week, when the company’s latest CEO Michael Searles joined with Britt to celebrate the Newark manufacturing plant’s official reopening. [...] The building’s high-tech paint-filling lines recently returned to service as have the plant’s 55 employees, who average a quarter century on the job.

Buffett GE Profit Trails Wall Street Bets as Warrants Expire (Bloomberg)

Berkshire Hathaway Inc.’s $3 billion bet on General Electric Co. during the 2008 financial crisis is proving less profitable than similar wagers by Chairman Warren Buffett on Goldman Sachs Group Inc. and Bank of America Corp. Berkshire is poised to get about $260 million in GE shares through warrants Buffett received as part of a capital injection into Fairfield, Connecticut-based GE.

Why Buffett's $10 Billion Haul Won't Be the Last (Fool)

Warren Buffett's investing genius pays off once again. Berkshire Hathaway has now racked up a whopping $10 billion profit on investments made during the financial crisis. That's no small sum, although against the backdrop of a company worth more than $280 billion, it isn't a game-changing sum, either. But focusing on the total return really misses the point: Buffett's Berkshire Hathaway is poised to do this time and time again.

Buffett’s Back Bench (WSJ)

This is a slideshow of 10 of the top executives from Berkshire Hathaway's many subsidiaries.

At 83 years old, Warren Buffett has not publicly named his successor. Some analysts and investors are also concerned about succession and retention at Berkshire Hathaway subsidiaries after Mr. Buffett is no longer in charge. Here are some of Mr. Buffett’s lieutenants.

'Cool' enough to be Warren Buffett's successor? (Upstart Business Journal)

[...] if Tracy Britt Cool is the mysterious new chief executive officer, how might she overcome scrutiny this week over executive turmoil at paint maker Benjamin Moore & Co., one of four Berkshire Hathaway portfolio companies that she’s appointed by Buffett to oversee? [...] In recent years, she’s been given major responsibilities, like chairing the boards of New Jersey-based Benjamin Moore, Omaha’s Oriental Trading Co., the Denver insulation maker Johns Manville and Atlanta custom framer Larson-Juhl. In 2012, Fortune Magazine named her to its 40 Under 40 list, and earlier this year, she was a Forbes 30 Under 30 winner in the finance category.

Berkshire Hathaway Real Estate

Finally, many of the Prudential Real Estate agencies that Berkshire Hathaway's HomeServices bought over the past year officially changed their names to "Berkshire Hathaway Real Estate" recently, but I've gotten tired of posting all those little, local real estate business stories. Just keep in mind that the re-branding is in full swing.