Warren Buffett's firm ups stakes in Japanese trading houses

Berkshire Hathaway Chairman and CEO Warren Buffett smiles during an interview in Omaha, Neb., May 7, 2018. Buffett's company has increased its investments in five major Japanese trading houses to give Berkshire Hathaway control of 7.4% of each of those conglomerates. Buffett disclosed the new investments Tuesday, April 11, 2023, in interviews with Nikkei and CNBC while he is visiting Tokyo this week to meet with executives at the Japanese companies. (AP Photo/Nati Harnik, File)

OMAHA, Neb. (AP) — Billionaire Warren Buffett's company has increased its investments in five major Japanese trading houses to give Berkshire Hathaway control of 7.4% of each of those conglomerates.

Buffett disclosed the new investments Tuesday in interviews with Nikkei and CNBC while he is vists Tokyo this week to meet with executives at the Japanese companies. Buffett said he is “very proud” of his investments in the trading houses that were first disclosed back in 2020.

Shares of Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co. and Sumitomo Corp. all surged after Buffett's new investments were reported.

Those trading houses themselves are some of Japan’s oldest and biggest companies that each hold investments in a variety of industries and other companies. Their conglomerate business models are somewhat similar to Buffett’s own company which owns dozens of companies including BNSF railroad, several major utilities and Geico insurance while also investing more than $300 billion in stocks.

Berkshire owns major stakes in Apple, Bank of America, Coca-Cola, American Express and several other iconic companies. And many investors follow Buffett’s moves closely because of his remarkably successful track record over the years.

Buffett said he'd consider investing in other Japanese companies or partnering with any of the trading companies if they need an investor to help them finance a deal in the future.

“We don’t think it’s impossible that we will partner with them at some point in the future in a specific deal,” he said to Nikkei. “We would love if any of the five would come to us ever and say, ‘We’re thinking of doing something very big or we’re about to buy something and we would like a partner or whatever.’”

Before the investments Buffett revealed this week, Berkshire previously owned 6.8% of Marubeni, 6.6% of Mitsubishi, Mitsui and Sumitomo and 6.2% of Itochu. Back in 2020, Berkshire bought just over 5% of all those companies and said at the time that it might eventually buy up to 9.9% of them.

Berkshire disclosed separately over the past week that it plans to issue a new round of bonds denominated in yen. That disclosure with the Securities and Exchange Commission prompted some speculation that Buffett's company may invest more in Japan.

Buffett told Nikkei that there are always a few Japanese companies “I'm thinking about” investing in, but for now Berkshire's only investments in that country are in the trading houses.

Buffett is getting ready to host Berkshire's annual meeting early next month when tens of thousands of investors will travel to Omaha, Nebraska, to listen to the 92-year-old spend the day answering questions alongside Berkshire's three vice chairmen.