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Berkshire Hathaway Automotive’s former CEO, Larry Van Tuyl, is now competing with Berkshire Hathaway’s dealerships with his purchase of Team Gillman Honda West in Houston, Texas.
Van Tuyl sold his Van Tuyl Group dealerships, which was founded by his father Cecil, to Berkshire Hathaway in April 2015 for $4.1 billion. At the time, the Van Tuyl Group was the largest independently owned dealership group in the U.S., and its acquisition moved Berkshire Hathaway squarely into the auto retailing business.
Warren Buffett has noted that the $4.1 billion price he paid for Van Tuyl Group also included a billion dollars in securities, as Van Tuyl also had a large float tied to financing and its extended warranty program, which was also acquired by Berkshire. Buffett said that people should “take a billion off the purchase price,” as the reported price has given other dealership groups an inflated sense of their market value.
After the acquisition, Larry Van Tuyl spent five years as the chairman of Berkshire Hathaway Automotive before leaving in 2020.
With the purchase of Team Gillman Honda West, Van Tuyl has shown that his passion for owning auto dealerships has not been sated.
© 2021 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.