Berkshire Hathaway takes a stake in five major Japanese companies

Warren Buffett (Photo: Getty Images)

The Berkshire Hathaway (BRK.A) holding company of famous American investor Warren Buffett announced on Monday that it had exceeded the threshold of 5% of the capital in five major Japanese trading houses, and is retaining the possibility of rising to 9.9 % in each of them.

The five companies concerned are Itochu, Marubeni, Mitsubishi Corp, Mitsui & Co and Sumitomo Corp, according to a statement from the company, which specifies that it has built its positions over a period of approximately 12 months.

The total amount of these transactions was not disclosed, but it could exceed $ 6 billion, according to calculations by the Bloomberg agency.

These five major import-export companies “have many joint ventures around the world and are likely to forge even more partnerships,” Buffett said in the statement.

“I hope there will be opportunities for mutual benefit in the future,” added Buffett, who just celebrated his 90th birthday on Sunday.

Japanese trading houses, called “sogo shosha”, are a special feature of the country. These companies are linked to the major Japanese industrial and financial groups, of which they are the intermediaries for commercial activities abroad.

They thus control a large part of the country’s foreign trade, as well as part of the distribution on the national market.

These sprawling companies are involved in a large number of sectors, in particular energy and raw materials, but also logistics, textiles, industry, food and even finance.

They are also holding companies investing for their own account in numerous companies, both in Japan and abroad.

For example, Itochu decided this summer to increase to 100% of the capital of FamilyMart, the number two Japanese convenience store in which it was already the majority shareholder, and Mitsui & Co held 5% of OSIsoft, American manufacturer of industrial software which will be acquired by Aveva, the British subsidiary of French company Schneider Electric.

Berkshire Hathaway, known for its very long-term investments (Apple, Coca-Cola, American Express, etc.), specified that it could eventually acquire up to 9.9% of the shares of one or the other of these trading houses, depending on the price.

Their titles soared on the Tokyo Stock Exchange on Monday: Marubeni closed with a gain of 9.48% to 639.6 yen, Sumitomo Corp of 9.09% to 1,374.5 yen, Mitsubishi Corp of 7.72% at 2,512.5 yen, Mitsui & Co up 7.35% to 1,914 yen and Itochu up 4.19% to 2,723.5 yen, while the Nikkei index ended the session up 1.12% .

The Japanese “bet” of Berkshire Hathaway “could become a catalyst” to interest more foreign investors in the Japanese stock market, said Shinichi Ichikawa of Pictet Asset Management in Tokyo, quoted by the Bloomberg agency.


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