Warren Buffett’s ‘elephant-sized’ acquisition: Billionaire investor may acquire this company in 2020

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Published: December 29, 2019 4:19 PM

Berkshire Hathaway had reported an 11 per cent decline in third-quarter profits due to a smaller increase in the paper value of its investments.

Warren Buffett, Warren Buffett wealth, Warren Buffett assets, Berkshire Hathaway, Berkshire Hathaway profit, Berkshire Hathaway results, Berkshire Hathaway profit q3The Oracle of Omaha Warren Buffett is likely to make an ‘elephant-sized’ acquisition next year. (Reuters)

The Oracle of Omaha Warren Buffett is likely to make an ‘elephant-sized’ acquisition next year and it will probably be in the transportation sector. Investing legend Buffett, who has $128 billion sitting on Berkshire Hathaway’s balance sheet, has said he plans to use a part of that capital to fund an ‘elephant-sized’ acquisition even as he hasn’t come across it so far, Observer reported. “I believe Warren Buffett will acquire Federal Express [in 2020],” Doug Kass, President of the hedge fund Seabreeze Partners Capital Management had told Yahoo Finance’s The First Trade on Tuesday as reported.

Warren Buffett’s Berkshire Hathaway already has a minority stake in FedEx’s competitor UPS and controls other logistics firms such as BNSF Railway Company, Charter Brokerage, McLane Company and XTRA Lease. Earlier, other hedge fund managers had also hinted towards the chances of FedEx acquisition. “This is the kind of thing Buffett looks for,” Trip Miller, Managing Partner, Gullane Capital Partners had suggested the acquisition on CNN Business in April. The likely acquisition of FedEx is among the three deals predicted by Kass for 2020, as Observer reported, including Amazon’s buyout of Kohl’s and Google acquisition of Twitter and Square.

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Berkshire Hathaway had reported an 11 per cent decline in third-quarter profits due to a smaller increase in the paper value of its investments, PTI reported. The company said it made $16.52 billion in the quarter that decreased from $18.54 billion a year ago.

Buffett has long said Berkshire’s operating earnings offer a better view of quarterly performance because they exclude investments and derivatives, which can vary. By that measure, Berkshire’s operating earnings improved to USD 7.86 billion, or USD 4,812 per Class A share, from USD 6.88 billion, or USD 4,186.05 per Class A share.

According to the recent Forbes Real-Time Billionaires List, Warren Buffett is the world’s fourth-richest person with a net worth of $88.8 billion. Jeff Bezos, Bernard Arnault (and family) and Bill Gates took the top three spots with a respective net worth of $111.5 billion, $109.9 billion, and $108.2 billion in 2019.

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