Berkshire Hathaway (NYSE:BRK.A) has made a big bet in Japan.
Berkshire Hathaway Chairman and Chief Executive Officer Warren Buffett, who turned age 90 on August 30, announced that his company has acquired a 5% stake in each of the five leading Japanese trading companies. The companies are Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co., and Sumitomo Corp.
Berkshire said it bought the holdings over a 12-month period through regular purchases on the Tokyo Stock Exchange. Based on Friday’s closing prices for the trading houses, a 5% stake in each would be valued at about $6.25 billion U.S.
The Japanese trading companies — known as "sogo shosha" — are conglomerates that import everything from energy and metals to food and textiles into resource-scarce Japan. The trading houses have helped grow the Japanese economy and contributed to the globalization of multiple businesses.
Berkshire says it intends to hold the investments for the long term, and that it may increase its holdings in any of the companies to a maximum of 9.9%. Berkshire also pledged to make no purchases beyond a 9.9% stake in any of the companies unless given approval by the trading companies’ Boards of Directors.
In describing its intentions for the investment in the trading houses, Berkshire pointed to its history of long-term, passive holdings in companies such as Coca-Cola Co. (NYSE:KO) and American Express Co., (NYSE: AXP) each of which Berkshire has owned for many decades.
