Berkshire Hathaway
Inc.
Formerly
|
Valley Falls Company
(1839–1955) |
Type
|
Public
|
Industry
|
Conglomerate
|
Founded
|
1839; 179 years ago
Cumberland, Rhode Island, U.S. |
Founder
|
Oliver Chace
|
Headquarters
|
Kiewit Plaza, Omaha, Nebraska, U.S.
|
Area served
|
Worldwide
|
Key people
|
Warren E. Buffett
(Chairman & CEO) Charles T. Munger (Vice Chairman) Ajit Jain (Vice Chairman of insurance business operations) Greg Abel (Vice Chairman of non-insurance business operations & Chairman and CEO of Berkshire Hathaway Energy) Marc D. Hamburg (Senior VP & CFO) |
Products
|
Diversified investments, Property & casualty insurance, Utilities, Restaurants, Food processing, Aerospace, Toys, Media, Automotive, Sporting goods, Consumer products, Internet, Real estate
|
Revenue
|
|
Operating
income
|
|
Net income
|
|
Total assets
|
|
Total equity
|
|
Owner
|
Warren Buffett (36.8%)
|
Number of employees
|
~377,000
|
After reaching a record high of No. 2
on the Fortune 500 last year, Warren Buffett’s Berkshire Hathaway drops back below Exxon. The conglomerate holding company–whose
many subsidiaries include Geico and the railroad Burlington Northern–struggled
to grow through acquisitions in 2017, losing out on its bid for Oncor when it
refused to raise its offer. Still, the Oracle of Omaha’s investment portfolio
beat the S&P 500, as Buffett traded in underperforming stocks like IBM for winners including Apple, now Berkshire’s largest holding. And
while the heavy hurricane season was tough on Berkshire’s reinsurance business,
it more than made up for the losses by selling a world-record-setting policy
to AIG for $10.2 billion.
History
Berkshire Hathaway traces its roots to a textile manufacturing company established by Oliver Chace in 1839 as the Valley
Falls Company in Valley Falls, Rhode Island. Chace had previously worked for Samuel Slater, the founder of the first
successful textile mill in America. Chace founded his first textile mill in
1806. In 1929, the Valley Falls Company merged with the Berkshire Cotton
Manufacturing Company established in 1889, in Adams,
Massachusetts.
The combined company was known as Berkshire Fine Spinning Associates.
 |
| Warren E. Buffett (Chairman & CEO) |
In 1955, Berkshire Fine Spinning Associates merged with the Hathaway Manufacturing Company which had been founded in
1888 in New Bedford, Massachusetts by Horatio Hathaway with profits from whaling and the China Trade. Hathaway had been
successful in its first decades, but it suffered during a general decline in
the textile
industry after
World War I. At this time, Hathaway was run by Seabury Stanton, whose investment efforts were
rewarded with renewed profitability after the Great Depression. After the
merger, Berkshire Hathaway had 15 plants employing over 12,000 workers with
over $120 million in revenue, and was headquartered in New Bedford. However, seven of those locations were closed by the end of
the decade, accompanied by large layoffs.
In 1962, Warren Buffett began buying stock in Berkshire
Hathaway after noticing a pattern in the price direction of its stock whenever
the company closed a mill. Eventually, Buffett acknowledged that the textile
business was waning and the company's financial situation was not going to
improve. In 1964, Stanton made an oral tender offer of $111⁄2 per share for the company
to buy back Buffett's shares. Buffett agreed to the deal. A few weeks later,
Warren Buffett received the tender offer in writing, but the tender offer was
for only $113⁄8. Buffett later admitted that this lower, undercutting offer
made him angry. Instead of selling at the
slightly lower price, Buffett decided to buy more of the stock to take control
of the company and fire Stanton (which he did). However, this put Buffett in a
situation where he was now majority owner of a textile business that was
failing.
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Buffett initially maintained Berkshire's core business of
textiles, but by 1967, he was expanding into the insurance industry and other
investments. Berkshire first ventured into the insurance business with the
purchase of National Indemnity Company. In the late 1970s, Berkshire acquired an equity stake in the Government
Employees Insurance Company , which forms the core of its insurance operations
today (and is a major source of capital for Berkshire Hathaway's other
investments). In 1985, the last textile operations (Hathaway's historic core)
were shut down.
In 2010, Buffett claimed that purchasing Berkshire
Hathaway was the biggest investment mistake he had ever made, and claimed that
it had denied him compounded investment returns of about $200 billion over
the subsequent 45 years. Buffett claimed that had
he invested that money directly in insurance businesses instead of buying out
Berkshire Hathaway (due to what he perceived as a slight by an individual),
those investments would have paid off several hundredfold.
List of subsidiaries
Company
|
Sector
|
Ownership %
|
Acquisition Date (YYYY/MM/DD)
|
Acme Brick Company
|
Materials and Construction
|
100%
|
2000/08/01
|
Applied Underwriters
|
Insurance and Finance
|
100%
|
2006/05/22
|
Ben Bridge Jeweler
|
Luxury Items
|
100%
|
2000/07/18
|
Benjamin Moore &
Co.
|
Materials and Construction
|
100%
|
2001/01/01
|
Berkshire
Hathaway Assurance
|
Bond Insurance
|
100%
|
2007/12/01
|
Berkshire Hathaway Automotive
|
Autosales
|
90%
|
2015/05/09
|
Berkshire Hathaway
Energy
|
Utilities
|
89.8%
|
1999/03/26
|
BoatUS
|
Insurance
|
2007/07/27
|
|
Borsheim's Fine
Jewelry
|
Luxury Items
|
100%
|
1989/01/01
|
Brooks Sports
|
Apparel
|
100%
|
2006/08/02
|
The Buffalo News
|
Media
|
100%
|
1977/04/01
|
Burlington
Northern Santa Fe Corporation
|
Railroads and Logistics
|
100%
|
2010/02/12
|
Business Wire
|
Media
|
100%
|
2006/03/01
|
Cavalier Homes
|
Materials and Construction
|
100%
|
2008/01/01
|
Central States
Indemnity
|
Insurance and Finance
|
100%
|
1992/10/20
|
Charter Brokerage
|
Logistics
|
100%
|
2014/12/12
|
Clayton Homes
|
Materials and Construction
|
100%
|
2007/05/10
|
CORT Business Services
|
Furniture Related
|
100%
|
2000/01/14
|
CTB Inc.
|
Capital Goods
|
100%
|
2002/01/01
|
Dairy Queen
|
Food and Beverage
|
99%
|
1997/10/21
|
Duracell
|
Household Products
|
100%
|
2016/02/29
|
Ebby Halliday Companies
|
Real Estate
|
100%
|
2018/06/04
|
Fechheimer Brothers Company
|
Clothing
|
100%
|
1986/01/01
|
FlightSafety
International
|
Business Services
|
100%
|
1997/01/01
|
Forest River
|
Materials and Construction
|
100%
|
2005/08/31
|
Fruit of the Loom
|
Clothing
|
99%
|
2002/04/30
|
Garanimals
|
Clothing
|
100%
|
2002/09/04
|
GEICO
|
Insurance and Finance
|
100%
|
1996/08/26
|
General Re
|
Insurance and Finance
|
100%
|
1995/12/21
|
Helzberg Diamonds
|
Luxury Items
|
100%
|
1995/01/01
|
H.H. Brown Shoe Group
|
Clothing
|
100%
|
1991/07/01
|
International
Metalworking Companies (IMC)
|
Materials and Construction
|
100%
|
2006/05/08
|
Johns Manville
|
Materials and Construction
|
100%
|
2001/02/27
|
Jordan's Furniture
|
Furniture Related
|
100%
|
1999/10/11
|
Justin Brands
|
Clothing
|
100%
|
2000/08/01
|
Kansas
Bankers Surety Company
|
Insurance and Finance
|
100%
|
1998/04/10
|
Larson-Juhl
|
Furniture Related
|
100%
|
2001/12/17
|
Louis Motor
|
Motorcycles
|
100%
|
2015/02/20
|
Lubrizol
|
Chemicals
|
100%
|
2011/09/16
|
Marmon Group
|
Diversified Holding Company
|
99%
|
2008/01/01
|
McLane Company
|
Logistics
|
100%
|
2003/05/23
|
Medical Protective
|
Liability Insurance
|
100%
|
2005/01/01
|
MiTek
|
Materials and Construction
|
90%
|
2001/06/12
|
National Indemnity
Company
|
Insurance and Finance
|
100%
|
1967/03/01
|
Nebraska Furniture
Mart
|
Furniture Related
|
80%
|
1983/01/01
|
NetJets
|
Business Services
|
100%
|
1998/01/01
|
NetJets Europe
|
Business Services
|
100%
|
1998/01/01
|
Omaha World-Herald
|
Media
|
100%
|
2011/12/01
|
Oriental Trading
Company
|
Toy Party Craft
|
100%
|
2012/01/01
|
Pampered Chef
|
Food and Beverage
|
100%
|
2002/09/23
|
Pilot Flying J
|
Retail, Food and Beverage, Petroleum
|
38.6%
|
2017/10/03
|
Precision Castparts
Corp.
|
Aerospace and Defense
|
100%
|
2016/01/29
|
Precision Steel Warehouse, Inc.
|
Materials and Construction
|
100%
|
1979/01/01
|
RC Willey Home
Furnishings
|
Furniture Related
|
1995/01/01
|
|
Richline Group
|
Wholesale and Manufacturing
|
100%
|
2007/05/01
|
Russell Brands
|
Sports Equipment Manufacturer
|
100%
|
2006/01/01
|
Scott Fetzer Company
|
Other
|
100%
|
1985/01/01
|
See's Candies
|
Food and Beverage
|
100%
|
1972/01/03
|
SE Homes
|
Materials and Construction
|
100%
|
2007/01/01
|
Shaw Industries
|
Materials and Construction
|
2002/01/21
|
|
Star Furniture
|
Furniture Related
|
100%
|
1997/07/14
|
TTI, Inc.
|
Electronic Component Distribution
|
100%
|
2007/03/30
|
United States Liability Insurance Group
|
Insurance and Finance
|
100%
|
2000/08/08
|
Wesco Financial
|
Insurance and Finance
|
100%
|
1978/01/01
|
WPLG-TV
|
Media
|
100%
|
2014/07/01
|
XTRA Lease
|
Logistics
|
100%
|
2001/09/20
|
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