Warren Buffett is getting into the automobile sales business.
The billionaire’s Berkshire Hathaway, owner of businesses ranging from the BNSF railroad to Dairy Queen, Geico insurance and power providers, is buying the privately owned auto dealership company Van Tuyl Group.
Financial terms were not disclosed.
Van Tuyl Group says it is the biggest privately owned auto dealership group in the US. It has 78 independently operated dealerships and more than 100 franchises in 10 states.
The company will be renamed Berkshire Hathaway Automotive and be based in Dallas.
Buffett, in an interview on CNBC on Thursday, said that there are huge opportunities for market consolidation in the fragmented auto dealership business.
This deal is one of a handful of times Buffett has applied his conglomerate’s name to one of the businesses it owns.
Originally, Berkshire Hathaway was the name of the struggling New England textile company that Buffett took control of in the 1960s. Buffett later closed the textile mills, but he has built Berkshire Hathaway into a conglomerate known for its financial strength.
Van Tuyl Group’s current chief executive officer, Larry Van Tuyl, will become chairman of the auto unit and Jeff Rachor will take over his role once Larry Van Tuyl transitions to the chairman position.
Buffett said that Van Tuyl’s job will be to scout out dealerships for potential acquisitions and determine which ones to pursue.
Buffett will provide the funding for any possible transactions.
“We’ve got the capital, so we’re off to the races,” he said.
Berkshire investor and biographer Andy Kilpatrick said this deal looks like it represents another long-term move into a new business for the company.
Also, it puts some of Berkshire’s roughly US$55 billion cash to work.
“I think it’s a major operating business,” said Kilpatrick, who wrote Of Permanent Value: The Story of Warren Buffett.
Stifel analyst James Albertine said the deal puts Omaha, Nebraska-based Berkshire in a good position to take advantage of trends in the industry and acquire dealers who either need to plan for succession or need capital to invest.
“We continue to believe the opportunity to consolidate the auto dealership sector presents one of the best medium to long-term growth opportunities across retail,” Albertine said in a research note.
The deal is expected to close in next year’s first quarter.
It still needs approval from major auto manufacturers.
The Eurovision Song Contest has seen a surge in punter interest at the bookmakers, becoming a major betting event, experts said ahead of last night’s giant glamfest in Basel. “Eurovision has quietly become one of the biggest betting events of the year,” said Tomi Huttunen, senior manager of the Online Computer Finland (OCS) betting and casino platform. Betting sites have long been used to gauge which way voters might be leaning ahead of the world’s biggest televised live music event. However, bookmakers highlight a huge increase in engagement in recent years — and this year in particular. “We’ve already passed 2023’s total activity and
Nvidia Corp CEO Jensen Huang (黃仁勳) today announced that his company has selected "Beitou Shilin" in Taipei for its new Taiwan office, called Nvidia Constellation, putting an end to months of speculation. Industry sources have said that the tech giant has been eyeing the Beitou Shilin Science Park as the site of its new overseas headquarters, and speculated that the new headquarters would be built on two plots of land designated as "T17" and "T18," which span 3.89 hectares in the park. "I think it's time for us to reveal one of the largest products we've ever built," Huang said near the
BIG BUCKS: Chairman Wei is expected to receive NT$34.12 million on a proposed NT$5 cash dividend plan, while the National Development Fund would get NT$8.27 billion Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday announced that its board of directors approved US$15.25 billion in capital appropriations for long-term expansion to meet growing demand. The funds are to be used for installing advanced technology and packaging capacity, expanding mature and specialty technology, and constructing fabs with facility systems, TSMC said in a statement. The board also approved a proposal to distribute a NT$5 cash dividend per share, based on first-quarter earnings per share of NT$13.94, it said. That surpasses the NT$4.50 dividend for the fourth quarter of last year. TSMC has said that while it is eager
China yesterday announced anti-dumping duties as high as 74.9 percent on imports of polyoxymethylene (POM) copolymers, a type of engineering plastic, from Taiwan, the US, the EU and Japan. The Chinese Ministry of Commerce’s findings conclude a probe launched in May last year, shortly after the US sharply increased tariffs on Chinese electric vehicles, computer chips and other imports. POM copolymers can partially replace metals such as copper and zinc, and have various applications, including in auto parts, electronics and medical equipment, the Chinese ministry has said. In January, it said initial investigations had determined that dumping was taking place, and implemented preliminary
RSS