Berkshire Hathaway 2008 Annual Report Download - page 39

Notes to Consolidated Financial Statements (Continued)
(2) Significant business acquisitions
Berkshire’s long-held acquisition strategy is to purchase businesses with consistent earning power, good returns on equity
and able and honest management at sensible prices. During the last three years, Berkshire acquired several businesses which are
described in the following paragraphs.
On February 28, 2006, Berkshire acquired Business Wire, a leading global distributor of corporate news, multimedia and
regulatory filings. On March 21, 2006, PacifiCorp, a regulated electric utility providing service to customers in six Western
states, was acquired for approximately $5.1 billion in cash. In conjunction with the acquisition of PacifiCorp, Berkshire
acquired additional common stock of MidAmerican for $3.4 billion, which increased its ownership interest in MidAmerican
from approximately 83% to approximately 88%. On May 19, 2006, Berkshire acquired 85% of Applied Underwriters, an
industry leader in integrated workers’ compensation solutions. On July 5, 2006, Berkshire acquired 80% of the Iscar
Metalworking Companies (“IMC”) for cash in a transaction that valued IMC at $5 billion. IMC, headquartered in Israel, is an
industry leader in the metal cutting tools business. IMC provides a comprehensive range of tools for the full scope of
metalworking applications. IMC’s products are manufactured through a global network of world-class, technologically
advanced manufacturing facilities and are sold worldwide. On August 2, 2006, Berkshire acquired Russell Corporation, a
leading branded athletic apparel and sporting goods company. Consideration paid for all businesses acquired in 2006 was
approximately $10.1 billion.
On March 30, 2007, Berkshire acquired TTI, Inc., a privately held electronic components distributor headquartered in Fort
Worth, Texas. TTI, Inc. is a leading distributor specialist of passive, interconnect and electromechanical components. Effective
April 1, 2007, Berkshire acquired the intimate apparel business of VF Corporation. Berkshire also acquired several other
relatively smaller businesses during 2007. Consideration paid for all businesses acquired in 2007 was approximately $1.6
billion.
On March 18, 2008, Berkshire acquired 60% of Marmon Holdings, Inc. (“Marmon”), a private company owned by trusts
for the benefit of members of the Pritzker Family of Chicago, for $4.5 billion. In the second quarter of 2008, Berkshire acquired
additional shares and currently owns 63.6% of Marmon. Under the terms of the purchase agreement, Berkshire will acquire the
remaining minority interests in Marmon between 2011 and 2014 for consideration to be based on the future earnings of
Marmon. Berkshire also acquired several other relatively small businesses during 2008. Consideration paid for all businesses
acquired in 2008 was approximately $6.1 billion.
Marmon consists of approximately 130 manufacturing and service businesses that operate independently within eleven
diverse business sectors. These sectors are: Engineered Wire & Cable, serving energy related markets, residential and
non-residential construction and other industries; Building Wire, producing copper electrical wiring for residential, commercial
and industrial buildings; Transportation Services & Engineered Products, including railroad tank cars and intermodal tank
containers; Highway Technologies, primarily serving the heavy-duty highway transportation industry; Distribution Services for
specialty pipe and steel tubing; Flow Products, producing a variety of metal products and materials for the plumbing, HVAC/R,
construction and industrial markets; Industrial Products, including metal fasteners, safety products and metal fabrication;
Construction Services, providing the leasing and operation of mobile cranes primarily to the energy, mining and petrochemical
markets; Water Treatment equipment for residential, commercial and industrial applications; Retail Store Fixtures, providing
store fixtures and accessories for major retailers worldwide; and Food Service Equipment, providing food preparation
equipment and shopping carts for restaurants and retailers worldwide. Marmon operates more than 250 manufacturing,
distribution and service facilities, primarily in North America, Europe and China. The Marmon purchase price allocation is
summarized below (in millions).
Assets: Liabilities and net assets acquired:
Cash and cash equivalents .....................$ 217 Accounts payable and other liabilities .......... $ 1,040
Accounts receivable .......................... 970 Notes payable and other borrowings ........... 1,071
Inventories ................................. 855 Income taxes, principally deferred ............ 1,733
Property, plant and equipment and leased assets .... 6,280 Minority shareholders’ interest ............... 1,568
Other, primarily goodwill and intangible assets .... 1,875 Net assets acquired ........................ 4,785
$10,197 $10,197
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