In a Berkshire Hathaway press release this evening (Tokyo Japan, 8:30 a.m. August 31, 2020 (JST)), the company revealed it had acquired 5% passive stakes in each of five leading Japanese trading companies.
“At the opening of business today, Berkshire Hathaway’s wholly-owned subsidiary,
National Indemnity Company, will notify Japan’s Kanto Local Finance Bureau that it has acquired
slightly more than 5% of the outstanding shares in five of the leading Japanese trading companies.
The companies, listed alphabetically, are Itochu, Marubeni, Mitsubishi, Mitsui and
Sumitomo. These holdings were acquired over a period of approximately twelve months through
regular purchases on the Tokyo Stock Exchange.
Berkshire Hathaway, the largest company in the U.S. as measured by shareholders’ equity,
has a long history of substantial, passive holdings in successful businesses. For instance, Berkshire
Hathaway has held major stakes in Coca-Cola for 32 years, American Express for 29 years and
Moody’s for 20 years.
Berkshire Hathaway’s intention is to hold its Japanese investments for the long term.
Depending on price, Berkshire Hathaway may increase its holdings up to a maximum of 9.9% in
any of the five investments. However, Warren E. Buffett, CEO of Berkshire Hathaway, has
pledged that the company will make purchases only up to an ownership of 9.9% in any of the five
investments. The company will make no purchases beyond that point unless given specific
approval by the investee’s board of directors.
Mr. Buffett expressed his pleasure with the investments: “I am delighted to have Berkshire
Hathaway participate in the future of Japan and the five companies we have chosen for investment.
The five major trading companies have many joint ventures throughout the world and are likely to
have more of these partnerships. I hope that in the future there may be opportunities of mutual
Berkshire Hathaway has 625.5 billion of yen-denominated bonds outstanding, maturing at
various dates beginning in 2023 and ending in 2060. Consequently, the company has only minor
exposure to yen/dollar movements.”