Buffett seeking deals outside of U.S.

May 19, 2008

Warren Buffett is meeting with business owners in Frankfurt, Germany as he looks for investments outside of the U.S. in order to spur growth of his $200 billion Berkshire Hathaway Inc. (www.berkshirehathaway.com).

This is the start of a four-city European tour seeking to form relationships that may lead to purchases by his Omaha, Neb. Based investment and holding company.

``If you have a great business, it's best to not sell it,'' Buffett told reporters at the Berkshire annual meeting in Omaha earlier this month. ``But when the time comes, whether for taxes or siblings, we want to be the first ones they think of.''

Berkshire has $35 billion in cash and has been looking for places to put it. He's invested in China, Israel and the U.K., complaining that there's a dearth of U.S. investment opportunities for a company as large as Berkshire.

Buffett's trip includes meetings in Lausanne , Madrid and Milan. The visit was arranged by Eitan Wertheimer, president of Israel's Iscar Metalworking Cos. -- acquired by Berkshire in 2006 in Buffett's first non-U.S. purchase – and Angelo Moratti of the family-run Italian energy company Saras Spa.

``Many families go through certain stages of strategic decision-making and they need to know their options,'' Iscar's Wertheimer said. ``From Warren you get much more than money. You're part of something that's unique.''

Since at least 2002, Buffett has made investments with the assumption the dollar will decline, first with direct bets against the currency, and then with the Iscar purchase. The euro fetched less than a dollar when Buffett first enlisted Moratti in 2001 to advise him on potential European purchases. It closed Friday at $1.5577.

``The U.S. is going to continue to follow policies that make the dollar weaker,'' Buffett said at the annual meeting. “Americans' preference for foreign goods causes the country to send about $2 billion in ‘IOUs’ and assets abroad every day, pressuring the dollar.

After paying $4 billion for 80 percent of Iscar, which makes cutting tools for manufacturers in plants around the world, Buffett said he hoped the deal would raise Berkshire's international profile and help him find new candidates in ``the bigger economies.''