Buffett eyes acquisition, keen to cut cash

Warren Buffett on Saturday told shareholders he wanted to reduce Berkshire Hathaway Inc’s cash pile as he looks for more profitable places to put the company's money, and that there was a chance he would make a $15 billion acquisition.

Warren Buffett on Saturday told shareholders he wanted to reduce Berkshire Hathaway Inc’s cash pile as he looks for more profitable places to put the company’s money, and that there was a chance he would make a $15 billion acquisition.

The chairman and chief executive, speaking at Berkshire’s annual meeting, also said that he sees the US dollar weakening further but said he reduced his stake in foreign currency contracts because there were better ways of avoiding damage to company profits.

The billionaire investment legend said Berkshire would ideally like to shrink the cash pile to about $10 billion, from about $40 billion currently.

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Speculation has mounted of late about what Buffett will do with insurance-to-ice cream conglomerate Berkshire’s cash.

On Friday, Berkshire said it would use some cash to boost its international presence, announcing it would buy 80 per cent of Israel’s Iscar Metalworking Cos in a transaction valuing the closely held tool firm at $5 billion.

Berkshire is diversifying through foreign acquisitions or taking holdings in companies with substantial operations overseas. Buffett said he plans for Berkshire to have a “fair amount” of earnings power coming from abroad.

He said he expects more opportunities for acquisitions in the utilities field.

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Berkshire’s first-quarter profit rose 70 per cent to $2.31 billion, or $1,501 per share, helped by a successful bet that the US dollar would fall.

It made a $151 million gain on the weaker US dollar, but its stake in foreign currency contracts declined to $5.4 billion from $13.8 billion at year-end.

Megan Davies

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