Warren Buffett's investment company Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) and Israeli company Iscar, Ltd. announced on Friday that that Berkshire Hathaway had agreed to acquire 80% of the Iscar Metalworking Companies (IMC) in a transaction that values IMC at $5 billion.
The Iscar Metalworking Companies, owned by the Wertheimer family, has operations worldwide, and is an industry leader in the metal cutting tools business through its Iscar, TaeguTec, Ingersoll and other IMC group companies. Upon completion of the transaction, Berkshire will own 80% of the business and the Wertheimer family will own the remaining 20%.The transaction remains subject to customary closing conditions, including regulatory approvals.
The deal is the largest ever acquisition by Buffett outside the US, and makes the Wertheimers Israel's wealthiest family.
After becoming a part of the Berkshire family of businesses, IMC will continue to be managed by its current management team, including Chairman Eitan Wertheimer and President and Chief Executive Officer Jacob Harpaz, as well as the rest of its current worldwide management team. IMC will remain headquartered in Tefen, Israel, and its worldwide business operations will continue as usual.
“We are delighted to partner with the Wertheimer family and IMC's current management, led by Eitan Wertheimer and Jacob Harpaz,“ said Buffett. “As a truly international business, IMC is a top performer in its industry, with exposure to European, Asian and Latin American markets, as well as significant opportunities for growth as it continues to penetrate the North American market. My partner, Charlie Munger, and I have been impressed by IMC's simple and profitable business model. With this acquisition, we have the benefit of investing in a stable business with very significant growth prospects.“
“As a member of the Berkshire family we'll have the benefit of a strong platform that's committed to continuing our historical success,“ said Eitan Wertheimer. “This transaction is not only significant for our company, our customers and our employees, but also for our industry, and for the State of Israel. We are gratified by Berkshire's investment in the group, and proud of what we have achieved since Iscar's founding more than 50 years ago by my father Stef Wertheimer, who will continue to lend his vision to the group. We are looking forward to a long and profitable partnership with Berkshire Hathaway.“
Published by Globes [online], Israel business news - www.globes.co.il - on May 7, 2006
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