Berkshire Hathaway to Buy 80% of Iscar

The multibillion-dollar acquisition appears to be the third-largest in Berkshire Hathaway's history.
Publish date:

Updated from 12:12 p.m. EDT

Warren Buffett's

Berkshire Hathaway


announced late Friday that it is acquiring a multibillion-dollar stake in

Iscar Metalworking

, a privately held maker of metal-cutting tools.

And on Saturday, at his company's annual meeting, Buffett said he wanted to put to work more of his company¿s cash hoard -- which totals about $40 million -- and eventually reduce it to about $10 billion, according to a


report. He also said there was a small chance he would make one acquisition requiring as much as $15 billion, the report said.

The Iscar transaction values the Israel-based company at $5 billion, said Berkshire Hathaway, which will acquire an 80% stake. The remaining 20% will stay with Iscar¿s current owners, the Wertheimer family.

Buffett won¿t break with his tradition of taking a hands-off approach to acquired companies. Iscar¿s chairman, Eitan Wertheimer, and CEO, Jacob Harpaz, will remain in charge, and the company¿s headquarters will stay in Tefen, Israel.

The acquisition is the third largest in Berkshire Hathaway¿s history, behind the 1998 purchase of reinsurer

General Re

and last year¿s acquisition of utility


, according to media reports.

Speculation was rife that Buffett¿s investment company would announce a major acquisition this weekend.

The Wall Street Journal

reported Friday that one was imminent, and investors have noted for some time that Berkshire Hathaway was sitting on plenty of cash.

At Saturday's meeting, the so-called Oracle of Omaha said he expected to find more opportunities for acquisitions in the utility sector, following the PacifiCorp purchase,



Buffett also hinted his company would be making more acquisitions of foreign companies, according to

The Wall Street Journal


The world's second-richest man, Buffett makes few public appearances, so investors and journalists listen closely to what he says at his company¿s annual meeting. As usual, he offered some observations on the markets and said that speculation was driving commodities such as copper, according to a


report. He also said that he no longer has a holding in the precious metal silver. Copper hit an all-time high Friday while silver reached its highest level in almost a quarter century two weeks ago.

Buffett also offered his thoughts about the nation¿s growing trade and current-account deficits, saying they could cause a sharp correction in the dollar that could lead to higher inflation,

The Wall Street Journal


On Friday Berkshire Hathaway disclosed

strong first-quarter earnings, driven by good showings in its insurance and derivatives units.