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Warren Buffett looks to Japan, takes 5% stakes in five trading companies

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    Reuters

New York, United States   /   Mon, August 31, 2020   /   09:39 am
Warren Buffett looks to Japan, takes 5% stakes in five trading companies Warren Buffett, CEO of Berkshire Hathaway, speaks to the press as he arrives at the 2019 annual shareholders meeting in Omaha, Nebraska, on May 4, 2019. Berkshire Hathaway Inc said it has acquired slightly more than 5 percent of the shares in five large Japanese companies. (AFP/Johannes Eisele)

Berkshire Hathaway Inc said it has acquired slightly more than 5 percent of the shares in five large Japanese companies, marking a departure for Chairman Warren Buffett as he looks outside the United States to bolster his conglomerate.

In a statement on Sunday, Buffett’s 90th birthday, Berkshire said it acquired its stakes in Itochu Corp, Marubeni Corp, Mitsubishi Corp, Mitsui & Co and Sumitomo Corp over approximately 12 months.

Berkshire said it intends to hold the investments for the long term, and may boost its stakes to 9.9 percent. A Berkshire insurance business, National Indemnity Co, is holding the shares.

“I am delighted to have Berkshire Hathaway participate in the future of Japan,” Buffett said in a statement. “The five major trading companies have many joint ventures throughout the world and are likely to have more.... I hope that in the future there may be opportunities of mutual benefit.”

The Japanese investments will help Buffett reduce his Omaha, Nebraska-based conglomerate’s dependence on the United States economy, which last quarter suffered its deepest contraction in at least 73 years as the coronavirus pandemic took hold.

Many of Berkshire’s own operating businesses have struggled, and Berkshire this month took a $9.8 billion writedown on its Precision Castparts aircraft parts business.

Berkshire owns more than 90 businesses including the BNSF railroad and Geico car insurer outright.

It also invests in dozens of companies including Apple Inc, with a roughly US$125 billion stake based on its holdings as of June 30, as well as American Express Co, Bank of America Corp and Coca-Cola Co.

Most of Berkshire’s operating businesses are American, though it has acquired a handful of foreign companies including Israel’s IMC International Metalworking and German motorcycle apparel retailer Detlev Louis.

Additional investments in Japan could also help Buffett reduce Berkshire’s cash stake, which ended June at a record $146.6 billion