Warren Buffett’s admiration for the German economy was on full display at the Berkshire Hathaway annual meeting on May 2, 2015.
This past February, Berkshire Hathaway struck a deal to acquire Devlet Louis Motorradvertriebs, a mail-order and retail chain selling motorbike clothing, helmets, leisurewear, add-on parts, and spare parts. The acquisition price was just over 400 million euros. The Hamburg, German-based retailer has 1,600 staff in their Europe-wide mail order business and at 70 retail stores in Germany and Austria.
Buffett likes Germany for a Variety of Reasons
“Germany is a terrific market, lots of people, lots of buying power, productive, it’s got a legal system we feel very good with, it’s got a regulatory system we feel very good with, it’s got people we feel very good with—and customers,” Warren Buffett explained back in February in an interview in German newspaper Handelsblatt.
The Three Ps
Buffett likes Germany because it has lots of people, they are productive, and they have lots of purchasing power.
While there was nothing formal to announce at the annual meeting, Buffett was emphatic that German companies are on Berkshire’s radar.
“I would be very surprised if we do not acquire at least one more company in Germany in the next 5 years,” he said, emphasizing that the euro’s recent plunge against the dollar makes European companies all the more attractive. “We’re far more on the radar screen than we were five years ago.”
© 2015 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.