Buffett, With Heinz Deal, Achieves 19th-Century Image of Robber Baron
NEW YORK ( TheStreet) -- For decades, Warren Buffett's fortune tied to Berkshire Hathaway (BRK.A) has put the Oracle of Omaha in the same stead as industry titans J. Pierpont Morgan, Henry Ford, John Rockefeller and Andrew Carnegie from 100 or more years ago.
As it turns out, by way of Berkshire Hathaway's recent acquisitions, Buffett would likely have been formidable competition to the likes of so-called robber barons Carnegie and Rockefeller had he been the product of an earlier century.
After the $28 billion acquisition of 144-year-old ketchup maker H.J. Heinz (HNZ) on Thursday, Buffett's investing conglomerate, Berkshire Hathaway, increasingly traces its roots to the 19th century, when a handful of men dominated U.S. industry and formed some of America's largest corporations.
Increasingly, it appears that as Buffett's fortune swells to a reported $46 billion, Berkshire's acquisitions are beginning to solidify his place in U.S. industry alongside the likes of billionaires from a past era.In recent years, Berkshire's largest acquisitions target companies that served 19th-century westward expansion, peddled early mass market consumer products, or were created in the throes of the Great Depression. The deals are indicative of Berkshire's focus on businesses insulated from competition and have the consistent earnings to last a century or longer. Berkshire's acquisitions, and a seeming focus on some of America's longest lasting and most iconic brands, also appear to play to Buffett's sense of history. The deal for H.J. Heinz targets a Pittsburgh-based company that dates to 1869 and a small horseradish operation that grew to 57 brands and over $11.5 billion in annual revenue over the years. For Berkshire Hathaway, the deal would be unique except for the fact that the investing conglomerate has long targeted 100-year-old businesses with distinctive products "moated" from competitors. Berkshire's largest deal, a 2009 acquisition of railroad Burlington Northern Santa Fe, harkens back to mid-19th-century Chicago and the industrialization and westward expansion of the United States. Amid consolidation of the railroad industry over a span of decades, Burlington Northern Santa Fe reached its present state in the mid-1990s. Berkshire's $26 billion bid put Buffett in the railroad business, where, a century prior, he would have been serving the needs of steel magnates like Carnegie or oil barons such as Rockefeller. Other recent deals indicate a fondness for 19th-century startups over a new breed of corporate giants emerging from Silicon Valley.
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