Berkshire Hathaway Story
We heared the name as familier because of Warren Buffett.But the founder of Berkshire Hathaway is Oliver Chace. An American Business man Lived in (August 24, 1769 – May 21, 1852).
Berkshire Hathway Inc is multinational company headquartered in Omaha, Nebraska, United States.The company wholly owns GEICO, Duracell, Dairy Queen, BNSF, Lubrizol, Fruit of the Loom, Helzberg Diamonds, Long & Foster, FlightSafety International, Pampered Chef, and NetJets, and also owns 38.6% of Pilot Flying J 26.7% of the Kraft Heinz Company, and significant minority holdings in American Express (17.6%), Wells Fargo (9.9%), The Coca-Cola Company (9.4%), Bank of America (6.8%), and Apple (5.22%).
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.
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 the majority owner of a textile business that was failing.
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 (GEICO), 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.
Business and Investments
Berkshire became a big name in investment and insurance companies under the leadership of Warren Buffet. It now provides insurance and reinsurance of property primarily in the United States. After the acquisition of General Re in December 1998, Berkshire insurance businesses now include reinsurers of life, accidents, health, casualty, and internationally based property.
Berkshire spread its wings into many other businesses successfully like manufacturing, services, retailing, and other non-insurance businesses.Berkshire is involved in manufacturing and distributing businesses of clothes and footwears. Clothing businesses include Russell Corporation, Garan, Fruit of the Loom, and Fechheimer Brothers. It’s footwear businesses include Justin Brands, Brooks Sports, H.H Brown Shoe Group, and Acme Boots.
Berkshire Hathaway has almost 13 different product categories worldwide with total revenue around $210 billion and has 331,000 employees.
- Berkshire entered into the business of building products in August 2000 with the acquisition of Acme Building Brands. Today, it has Benjamin Moore & Co., Johns Manville, 90% equity interest in MiTek, Shaw Industries, Clayton Homes, and Dayton Superior.
- Berkshire acquired FlightSafety International Inc. in 1996 which provides high technology training to aircraft and ships operators and also acquired NetJets Inc. in 1998.
- Berkshire is the leading national provider of rental services like providing furniture and accessories on rent. Berkshire purchased a chain of jewelry stores known as Ben Bridge Jeweler, in May 2000.
- Berkshire also acquired Media services by buying Buffalo Evening News in 1977 and in 2006 it went to buy Business Wire, the famous U.S press release agency. At present, it has The Eagle- Texas dailies, Waco Tribune-Herald, Tulsa World, News & Record, Roanoke Times, and Press of Atlantic City.