Kraft Heinz Covets Campbell

(BRK.A), (BRK.B)

Kraft Heinz is looking to acquire Campbell according to a report in the New York Post.

According to the Post, Kraft Heinz assumes that the soup company’s strategic review will lead to a sale, especially after its stock has tumbled 21% in the past six months, and it wants to be first in line.

In addition to its familiar soups, Campbell owns a host of top brands, including Pepperidge Farm breads, cookies and Goldfish crackers; Royal Dansk and Kjeldsens cookies; V8 beverages; Bolthouse Farms beverages, carrots and dressings; Plum Organics baby food; Swanson broths; Prego pasta sauces; Garden Fresh Gourmet fresh refrigerated salsas, dips and hummus, and Pace sauces.

Campbell has been seeking to spur its own growth through acquisition. In March, Campbell created a new snack division after its $4.87 billion cash acquisition of snack-maker Snyder-Lance. The deal was financed with $5.3 billion of bonds.

The company is projecting $10 billion in annual revenue from its snack brands, however the acquisition price was considered steep to say the least.

Ask any analyst about potential Berkshire Hathaway acquisitions and Campbell usually finds its way on the list.

Kraft Heinz was rebuffed in its megadeal for Unilever in February 2017, so smaller deals look to be the way forward for now.

With 3G Capital’s Bernardo Hees at the helm, Kraft Heinz has been in relentless cost-cutting mode since 2015, and Campbell has been in the midst of its own $500 million effort, so it’s not clear how much more savings Kraft Heinz can wring out of it.

In any case, Kraft Heinz, which is in third place worldwide among global food conglomerates, is clearly looking to move up the chart. With Berkshire’s money behind it, there’s little doubt they will.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

GEICO to Add 500 Employees in Kansas at New Office

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GEICO announced at the ribbon-cutting event that opened its newest office in Lenexa, Kansas that it will add 500 associates during the next five years.

Joining GEICO Chairman Tony Nicely in making the announcement were Kansas Governor Jeff Colyer, M.D., Warren Buffett, chairman of Berkshire Hathaway, GEICO’s parent company, and U.S., state, county and local officials.

“Kansas’ business-friendly climate continues to attract innovative, pioneering companies like GEICO,” said Gov. Colyer. “We appreciate GEICO for recognizing Kansas as a state where financial services firms can be very successful. The 500 new jobs created by GEICO’s investment will be a tremendous boost for the Kansas economy, and we are looking forward to the future growth of this partnership.”

“We are very pleased that we’ll have this chance to become a part of the enterprising and highly thriving area in Lenexa and Kansas City,” said Tony Nicely. “When we began looking for a new office, everything we learned about the community made us eager to open a new operation here. We expect to have it up and running close to Labor Day.”

GEICO president Bill Roberts noted that GEICO will begin recruiting soon for sales and service positions in its

GEICO Insurance Agency (GIA) operations in Lenexa. Later the company will be hiring claims professionals.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Tops Among Class 1 Railroads

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With its carloads up a strong 10.2 percent year-over-year, BNSF Railway is continuing to power towards an outstandingly profitable year.

The strong gains are the highest of all Class 1 railroads.

Of particular note are higher grain shipments, as well as significant increases in metallic ores and sand/gravel.

The grain shipments mean a record number of trains running through Southwest Washington state. The new record surpasses the previous record set pre-Great Recession in 2006.

Just another sign that this is shaping up to be a very good year for BNSF.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

HomeServices of America Acquires Berkshire Hathaway HomeServices Ambassador Real Estate

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Berkshire Hathaway’s HomeServices of America has acquired Berkshire Hathaway HomeServices Ambassador Real Estate as well as an ownership interest in Ambassador Title Services. Financial terms of the transaction were not disclosed.

Headquartered in Omaha, Nebraska, Ambassador Real Estate serves the Omaha, Lincoln, Council Bluffs, Fremont, and Dundee communities with 630 sales associates operating in five sales offices. In 2017, Ambassador closed more than $2.1 billion in sales volume.

Led by its president Vince Leisey, Ambassador Real Estate has experienced year-over-year market-share growth and is widely recognized for its progressive and collaborative culture. In 2017, the company was ranked in Entrepreneur Magazine and CultureIQ’s Top Company Cultures list as the 12th best company culture in the United States in the large-company category.

Leisey is among the real estate industry’s most recognized and charismatic leaders and is known for his inspirational leadership style and approach to driving employee and agent engagement and productivity through one-on-one coaching, teamwork, and communication. Along with his existing executive team and sales managers, he will continue to lead Ambassador Real Estate’s strategic planning and growth initiatives as well as manage the company’s day-to-day operations.

“I am thrilled to join HomeServices’ family of companies. When you combine the exceptional culture that is the core of Ambassador’s productivity and success with HomeServices’ commitment to delivering exceptional service to its buyers and sellers and its unsurpassed growth opportunities, there is no limit to what we can accomplish,” said Leisey.

“Vince brings strategic vision, an innovative spirit and proven leadership qualities and, together with his team of sales managers and agents, has built an extraordinary organization,” said Ron Peltier, HomeServices’ chairman and CEO.

“Developing strategies that drive innovation and productivity across HomeServices’ family of companies is key to our mission of delivering value to our agents and consumers,” added Peltier. “We look forward to working with Vince and his team and are very proud to welcome them to HomeServices.”

The acquisition further expands HomeServices’ presence in the Omaha and Lincoln, Nebraska markets, which include Omaha-based CBSHOME and Lincoln-based Woods Bros. Realty and HOME Real Estate. They will continue to operate as independently-branded companies in their respective markets.

With this transaction, HomeServices has nearly 43,000 real estate professionals operating in nearly 900 offices across 30 states. In 2017, the company’s associates facilitated over $137 billion in residential real estate sales and nearly 360,000 transactions (including the 2017 and 2018-to-date acquisitions pro-forma), further strengthening HomeServices’ position of becoming the nation’s largest real estate brokerage company based on transactions.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Kraft Heinz Maps Future With New Innovation Center in The Netherlands

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Kraft Heinz is opening a €90m innovation center in Amsterdam’s Zuidas business district.

The center will employ 450 people and its goal is not so much brand or product development as focusing the food conglomerate on new ways of operating.

The center’s location will be just 10 minutes from Schiphol airport, a major European hub.

The Centre for Excellence will “devise ways to work more efficiently by creating globally applicable best practices.”

“The Global Centre of Excellence is focused on new methods of growth and operational efficiencies while our R&D and culinary centre in Nijmegen continues to drive new product development across the Zone,” noted Rafa Oliveira, president of Kraft Heinz’s operations in Europe, the Middle East and Africa.

The Netherlands is a major focal point for Kraft Heinz’s European operations. The company already has a R&D and culinary center in Nijmegen and production facilities in Elst and Utrecht.

In 2017, the company opened a 61,700 sq m distribution facility at the Park15 industrial park in the Arnhem-Nijmegen region of the eastern Netherlands. The business park is strategically located between the port of Rotterdam and the German Ruhr Valley.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Mouser Electronics Recognized with More Than 25 Top Awards for Excellence

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Berkshire Hathaway’s Mouser Electronics has received over 25 top business awards from its supplier partners for exemplary performance during 2017.

Suppliers cited many criteria for the honors, including double-digit growth, fastest new product introductions (NPIs), breadth of inventory, best-in-class global marketing campaigns, customer growth, global expansion and commitment to teamwork.

“It is very rewarding to be recognized by our supplier partners, who share our mission of delivering the newest technologies and providing best-in-class customer service,” said Jeff Newell, Senior Vice President of Products at Mouser Electronics. “These awards honor the outstanding teamwork we share with these valued supplier partners.”

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Johns Manville Named Supplier of the Year

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Berkshire Hathaway’s Johns Manville has been named “Supplier of the Year” for 2017 by Insulate America Inc., the nation’s largest insulation contractor association.

JM received this same honor in 2013, 2014, 2015 and 2017 for each previous year’s performance. Insulate America’s “Supplier of the Year” award recognizes companies for the overall value they provide to the organization through technical expertise, customer support and lead referrals.

“At a time marked by heightened competitive pressure, JM has demonstrated an unparalleled level of dedication and commitment to Insulate America. We are proud to recognize them yet again with this award,” said Insulate America President and CEO David Beam. “With their top-notch service and innovative product solutions, we appreciate the support they provide to help us meet our customers’ needs.”

Insulate America is a cooperative group of locally owned, independent insulation contractors who provide and install quality insulation and other building products for residential and commercial construction. It is the largest independent insulation contracting organization in the U.S. with over 200 locations across the nation. Representatives from each of the locations vote on the “Supplier of the Year” award.

“2018 marks our 18th year of doing business with Insulate America, and it has been a productive and highly rewarding partnership,” said Bob Wamboldt, president of JM Insulation Systems. “We are humbled by this recognition, and we look forward to a future with Insulate America that will be every bit as positive as the experience we’ve had over the past 17 years.”

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Berkshire Brokerage Superpower Created in Pittsburgh

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Northwood Realty Services has announced it will acquire Berkshire Hathaway HomeServices The Preferred Realty and join the Berkshire Hathaway HomeServices network in August operating as Berkshire Hathaway HomeServices The Preferred Realty.

The union creates a brokerage superpower of more than 1,800 agents and 50 offices serving 22 counties in Western Pennsylvania and Eastern Ohio.

The Preferred Realty and its family of companies would be the No. 1 residential real estate brokerage in greater Pittsburgh for sales volume, units and listings based on West-Penn MLS data through May. It would also be the No. 20 company across the entire industry for units based on REALTrends data; and No. 10 in the Berkshire Hathaway HomeServices network for gross commission income.

Tom Hosack, Northwood Realty Services president and CEO, will serve as co-president and CEO of The Preferred Realty. Jim Saxon of The Preferred Realty will be co-president and COO. Northwood Realty Services’ Wendy West remains chairwoman of the brokerage’s board of directors, while Ron Croushore, CEO of The Preferred Realty, becomes the board’s vice chairman.

“This union is a wonderful fit for all parties involved,” said Hosack. “We are both family-run companies that care deeply about the success of our agents and employees. We are passionate about helping consumers with their real estate needs and aspirations. Our new brokerage is grounded in a shared philosophy and supported by Berkshire Hathaway HomeServices, one of the fastest-growing brands in real estate.”

Croushore said the transaction brings even more opportunities for the expanded brokerage. “We thoroughly cover Western Pennsylvania and Eastern Ohio with top agents and a complete line of real estate services,” he explained. “Our economies of scale will help us innovate, market and grow our services. As part of my legacy I want to see The Preferred Realty grow for generations to come. We are certainly on that track.”

Saxon added that timing of the transaction is ideal. “Our markets are growing and changing, just like our competitors,” he explained. “It’s more important than ever for our agents to be supported with the most effective technology, tools, education and leadership to help them succeed. Combined, we will build on our best practices, processes and products, and compete in unprecedented ways.”

Founded in 1956, Northwood Realty Services is owned and operated by Everest Consulting Group, LP. The brokerage’s sister companies include mortgage lenders West Penn Financial Service Center and People First Financial, plus Everest Insurance, LLC, and Everest Settlement. It established a commercial real estate division in 2017.

The Preferred Realty family includes Preferred Insurance, Preferred Settlement Services, RE Educators, Preferred Property Management Company and Referral Associates of PA.

Gino Blefari, president and CEO of Berkshire Hathaway HomeServices, applauded the union. “This is a great move for both companies,” he said. “Tom Hosack, Ron Croushore and Jim Saxon have built dream team that should dominate the landscape for years to come.”

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Brazil Latest Country for BYD’s SkyRail

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BYD has signed an agreement to construct its SkyRail monorail in the Brazilian city of Salvador. the project will be the first of its kind for BYD in Latin America.

The 20 kilometers seaside route will be partially built above the sea to connect to an offshore island, with another portion traversing above a 19th century railway track that is set to be converted into a pedestrian zone.

Construction for the 2.5 billion Brazilian real (689 million US dollars) project will be divided into two phases, and is scheduled to begin in the fourth quarter of 2018 and be operational in 2021.

BYD’s monorail project will connect with the existing subway, providing seamless transportation for the city of 3.8 million residents.

“Air pollution and traffic congestion are the twin evils of urban living. The SkyRail will provide the residents of Salvador with a low-carbon and more convenient way of travelling,” said BYD senior vice president Stella Li. “This project is an important milestone in our global revolution. BYD is willing to work together with our partners to electrify transport and make it smarter.”

Among the features highlighted for SkyRail are its strong climbing capacity makes the vehicle capable of negotiating the difficult local terrain where a distance of 400 meters requires an increase of 80 meters. In addition, the SkyRail is quiet and carbon-free. Its elevated construction does not affect normal pedestrian and traffic flow, providing a non-disruptive addition to Salvador’s urban landscape.

The local government has plans to boost tourism in the area where the SkyRail will be constructed with the help of domestic companies.

SkyRail was first launched in October 2016 after five years of research and development worth 5 billion RMB. It is currently operational in the western Chinese city of Yinchuan. Outside of China, BYD has won strategic partnerships with countries such as the Philippines, Egypt, Morocco and Cambodia.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Berkshire Finally Cashes Out of USG

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After 17 years riding USG’s stock up and down, Warren Buffett is finally going to cash out with a profit.

Gebr. Knauf KG and USG Corporation have entered into a definitive agreement pursuant to which Knauf will acquire all of the outstanding shares of USG in a transaction valued at approximately $7.0 billion.

Under the terms of the agreement, USG shareholders will receive $44.00 per share, which consists of $43.50 per share in cash payable upon closing of the transaction and a $0.50 per share special dividend that would be paid following shareholder approval of the transaction.

The price represents a premium of 31% to USG’s unaffected closing price of $33.51 and a 36% premium to the $32.36 average closing price for the preceding 12-month period, both as of March 23, 2018, and a multiple of approximately 11.6x USG’s adjusted EBITDA for the 12 months ended March 31, 2018.

The transaction was unanimously approved by USG’s Board of Directors.

Berkshire Hathaway has agreed to vote its shares in favor of the transaction. As of June 11, 2018, Berkshire Hathaway and its subsidiaries owns approximately 31% of the issued and outstanding shares of USG.

While Berkshire will exit its position with a profit, Warren Buffett had previously expressed his disappointment with the fortunes of the company.

“So just put that one down as not one of our brilliant ideas,” Buffett said. “Not a disaster,” he added.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.