Berkshire may increase stakes in Japanese companies — The Japan Times
In Japan, U.S. investment company Berkshire Hathaway is considering increasing its stakes in five major trading companies. Masahiro Okafuji, chairman of the Japan Foreign Trade Council, said this after a meeting with Berkshire CEO Greg Abel, The Japan Times reports.
Investments in five companies
Berkshire Hathaway owns stakes of more than 10% in Mitsubishi, Sumitomo, Mitsui, Marubeni and Itochu. Okafuji also heads Itochu. According to him, following his meeting with Abel in early September, he believes that Berkshire intends to hold its investments in Japanese trading companies for the long term and is considering increasing them.
During his trip to Japan, Abel met with the executives of these companies. In an interview with the Nikkei newspaper, he also said that Berkshire could increase its stakes in them.
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Reasons for interest
Okafuji noted that Berkshire positively assesses the competitive advantages of Japanese trading companies, including their extensive international networks and high level of capital allocation. According to him, these factors create significant barriers to market entry for competitors and are one of the reasons for the U.S. company's investment.
According to the council chairman, Berkshire does not nitpick the activities of the trading companies. He added that the company made it clear that it would not object if such stakes were increased to 15%. At the same time, Okafuji noted that broader cooperation between Berkshire and Japanese trading companies could create a conflict of interest, as the U.S. company is already their shareholder.
Berkshire Hathaway, previously led by Warren Buffett, began investing in Japanese trading companies more than six years ago and has gradually increased its stakes since then. The company also regularly issues yen-denominated bonds.
