Warren Buffett's Berkshire Hathaway Inc. will pay $4.5 billion to gain control of Marmon Holdings Inc., the Pritzker family's closely held collection of 125 companies, in what may be his biggest non-insurance acquisition.
Berkshire will take a 60 percent stake and buy the rest later, the Omaha, Nebraska-based firm said in a statement yesterday. The Pritzkers, who control Global Hyatt Corp., built Marmon into a group with $7 billion in annual sales that includes a 61,000-car railroad leasing subsidiary.
Marmon has ``businesses that are fairly niche-oriented where they have dominant positions established over time,'' said Thomas Russo, who manages about $3.5 billion at Gardner Russo & Gardner in Lancaster, Pennsylvania and counts Berkshire as its largest holding. ``They have a history under the Pritzkers of being liberated from the quarterly earnings game.''
Buffett, 77, bought the Chicago-based company after he spent October scouting for companies in Asia and lamenting that he couldn't find anything big enough to absorb Berkshire's cash hoard of about $45 billion. His biggest takeover last year was the $4 billion purchase of Iscar Metalworking Cos. from Israel's Wertheimer family.
Marmon is ``our kind of company,'' Buffett said in an interview with CNBC today. ``It's in some very basic businesses but good businesses.''