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Dairy Queen

Dairy Queen Opens First Restaurant in South Korea

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Berkshire Hathaway’s International Dairy Queen, Inc. has launched itse first DQ Grill & Chill location in South Korea.

Located in the Daehak-ro area of Seoul, it is the first of 50 locations that are planned in South Korea within the next five years.

Additional DQ Grill & Chill locations will soon open in Itaewon, Gangnam and Hongdae.

The DQ Grill & Chill locations in South Korea will serve fan-favorite DQ treats and food, including the world-famous Blizzard Treats, which are served upside down, soft-serve cones with the signature curl on top, sundaes and DQ Cakes as well as a full range of food options such as GrillBurgers, chicken strip baskets, chicken sandwiches and a variety of salads.

In addition, new and exciting menu items available in South Korea will include Asia-inspired Blizzard Treats, such as a Green Tea Red Bean Blizzard Treat, and Asia-inspired smoothies. The new restaurants also will launch a beverage platform complete with soft drinks, Ades, smoothies, coffees and teas.

“We continue to expand the DQ brand in Asia,” says John Gainor, President and CEO of International Dairy Queen, Inc. (IDQ). “We have partnered with a franchisee that is a veteran of the food business and has an experienced team already in place. We look forward to introducing DQ Grill & Chill restaurants to our fans in South Korea.”

IDQ’s subsidiary, American Dairy Queen Corporation (ADQ), signed a multi-unit development agreement to develop restaurants in South Korea with the privately held M2G USA Investment, Inc., which has a diversified business portfolio that includes ownership of restaurants, hotels, public storage businesses, household appliance manufacturing, shoes and an extensive global real estate portfolio.

The DQ system has more than 6,800 locations with more than 2,300 of those units operating outside of the United States.

For more information on Dairy Queen’s world-wide plans, read a Mazor’sEdge special report on Dairy Queen.

© 2017 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.

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Berkshire Hathaway Specialty Insurance Insurance

Berkshire Hathaway Specialty Insurance Expands Coverage for Large Contractors

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Berkshire Hathaway Specialty Insurance has unveiled the Excess Integrated Follow Form, a single excess policy that sits atop multiple first- and third-party insurance policies, for contractors in the U.S. and Canada.

“With multi-line excess coverage from BHSI, contractors gain consistency in limits and tower attachment points and can reduce gaps in coverage. They also benefit from streamlined claims services when they have a loss and reduced frictional claims expenses,” said Bill Sullivan, North American Head of Casualty Construction, BHSI.

The new BHSI policy provides excess follow form protection above multiple underlying coverages, including general liability, environmental liability, employer’s liability, and professional liability. The excess coverage comes with a single limit, backed by BHSI’s financial strength. The Excess Integrated Follow Form is designed for larger contractors with complex exposures.

© 2017 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.

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Dairy Queen

Major Texas Dairy Queen Franchisee Goes Bankrupt

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The U.S’s second largest franchise operator of Dairy Queen restaurants, Vasari, has filed for bankruptcy protection. The company blames the decline in the west Texas oil businesses for hurting its revenues.

Owned by Vickie L. Driver of Husch Blackwell, and William M. Spae Jr., Vasari operates 70 DQ locations across Texas, Oklahoma and New Mexico.

Vasari has filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Northern District of Texas, Fort Worth Division. In its filing it noted:

“The difficulties faced by the Debtor can largely be traced to the much publicized decline in oil prices. The decline in oil prices has severely impacted the job market for oil related jobs in regions of west Texas and east Oklahoma and has thus resulted in cross-industry declines in revenues in areas heavily dependent on oil related jobs. Many of the Debtor’s DQ locations sit in ‘Oil Country’ and have been severely impacted by the decline in oil prices due in large part to the loss of oil-related jobs and the resulting mass exodus of residents from areas in which the DQ locations sit. Since bouncing from a 12 year low, oil prices have begun to rebound; however, oil-related jobs have not. Without oil-related jobs, certain DQ locations will likely continue to underperform, causing a drain on the Debtor’s resources.”

Texas is a stronghold for the Dairy Queen brand. The chain is particularly popular in southern states, with 600+ stores in Texas alone, and Texas has its own marketing association, the Texas Dairy Queen Operators Council.

In conjunction with the announcement of the bankruptcy, Vasari immediately closed 18 Dairy Queen restaurants in Texas and four in New Mexico and Oklahoma.

For more information on Dairy Queen’s world-wide plans, read a Mazor’sEdge special report on Dairy Queen.

© 2017 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.

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CTB

CTB to have Strong Growth in Poultry Processing

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Berkshire Hathaway’s CTB, Inc. is projected to have strong growth in its sales of poultry processing equipment.

According to a report published on marketsandmarkets.com, the poultry processing equipment market is projected to reach USD 3.83 Billion by 2020, at a CAGR of 4.7% from 2015 to 2020.

The report “Poultry Processing Equipment Market by Type (Chicken, Turkey, Ducks), Equipment Type (Killing & Defeathering, Evisceration, Cut-ups, Deboning & Skinning, Marinating & Tumbling), Product Type, & by Region – Global Forecast to 2020,” notes that “increased consumption of processed food, the government support for the use of equipment in developing countries, the demand for food safety, safety of workers, environment and sustainability, the presence of small and medium enterprises in developing countries, rising raw material costs, and international trade rules are the major drivers for the poultry processing equipment market.”

In 2016, CTB acquired the majority share in Danish company Cabinplant A/S. The acquisition added additional poultry processing equipment to CTB’s existing line of Meyn processing equipment for poultry, as well as processing solutions for fish and shellfish, fruit and vegetables, and convenience foods.

“Market requirements are constantly increasing,” states Erik Blom, Managing Director of Meyn Food Processing Technology, “and we will keep investing in intelligent solutions according to different international standards.” With three production sites in Oostzaan/The Netherlands, Poland and the United States as well as offices all over the world, Meyn is in close cooperation and communication with their clients in over 100 countries and prepared to answer the challenges of the future.

© 2017 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.

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Acquisitions Berkshire Hathaway Energy

MidAmerican Energy Buys Wind Farm from Tradewind Energy

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Berkshire Hathaway continues to add to its renewable energy portfolio. Berkshire’s MidAmerican Energy Co., a subsidiary of Berkshire Hathaway Energy, has purchased the North English Wind Project, which is currently under construction in Iowa.

When completed, North English will generate 340 megawatts of wind energy.

The North English Wind Project is located approximately 60 miles east of Des Moines, Iowa in the high-yielding corn and soybean farmlands of Poweshiek County, Iowa. The wind farm is expected to interconnect to a 345 kV (MIDAM) line located in Poweshiek County.

“We are thrilled to support Iowa’s continued leadership in wind energy through the development of the North English Wind Project,” Jeff Hammond, senior development manager for Tradewind, said in a statement. “MidAmerican Energy Co. has a vision to provide 100 percent renewable energy for its customers, and it’s exciting to partner with them toward achieving that goal.”

According to Tradewind, more than 200 landowners and over 30,000 acres will be involved in the project.

© 2017 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.

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Forest River

Forest River Marine Joins the Marine Retailers Association of the Americas

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Berkshire Hathaway’s Forest River Marine, a division of Forest River, Inc., has become a platinum member of the Marine Retailers Association of the Americas.

The MRAA’s mission is to be the single voice of marine retailers, providing member services that include: fostering and uniting relationships; raising awareness and professionalism; protecting common interests and strengthening all members.

The association is comprised of boat dealers, marine parts and accessories vendors, marina operators, boatyards, marine service providers, and all those whose livelihood is affected by the marine industry.

“We believe in the importance of a strong and effective dealer body,” said Tom McCuddy, Forest River Marine general manager. “We are proud to have a strong network of dealers, and we believe that supporting the work of our industry’s dealer association is an important contributor to the overall health of our industry and our boating community.”

Forest River Marine is a leading manufacturer of pontoon boats under the Berkshire, South Bay, and Trifecta brands.

“The Forest River team has shown a great desire to strengthen its dealer network in support of their customers,” said MRAA President Matt Gruhn. “From their participation at our annual conference all the way through to their communications with the Forest River dealer network about programs and opportunities that our team here at MRAA has to offer them, they continue to invest in and lead the way with dealer development.”

© 2017 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.

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Acquisitions Commentary Minority Stock Positions Stock Portfolio

Commentary: Akzo Nobel and Axalta Coatings Merger Would Benefit Berkshire Hathaway

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A possible merger between Akzo Nobel NV and Axalta Coating Systems would give Berkshire Hathaway a major stake in a world-leader in the coatings market.

The Dutch coatings company Akzo Nobel is reportedly in the discussion stage with Philadelphia-based Axalta on a deal that could create a $30 billion coatings behemoth. The discussions have been described as a “merger of equals’ even though Axalta is the smaller of the two companies.

One of the benefits for Akzo Nobel would be to make it too large for takeover by other coasting companies, including PPG Industries.

The potential merger has already benefited Berkshire, as shares in Axalta soared 17% to Friday’s closing price of $33.15 on news of the discussions.

Berkshire currently owns 23,324,000 shares of Axalta, which is approximately 9.59% of the company, and has a value of roughly $745,668,263. 20 million of its stake was purchased in April of 2015 from The Carlyle Group for an aggregate purchase price of $560 million, or $28.00 per share.

Axalta was founded in 1866 as Herberts, the original producer of Standox paint products. Spun off of DuPont Performance Coatings in 2013, it was sold to The Carlyle Group and renamed Axalta Coating Systems. Today the company is a leader in coatings for commercial vehicles.

When Berkshire took its stake in Axalta back in 2015, the company looked like a possible merger candidate with Berkshire’s Lubrizol. However, Berkshire’s never been shy about owning significant minority stakes in companies if they are purchased at favorable prices.

Such is the case with Axalta.

© 2017 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

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Acquisitions Berkshire Hathaway Energy Commentary

Commentary: Could the Door Open Again for a Berkshire Acquisition of Oncor?

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Berkshire Hathaway’s ongoing interest in acquiring Oncor Electric Delivery might still have a chance, if only a faint one.

Sempra Energy, which this August outbid Berkshire for Oncor, is running into some of the same resistance that torpedoed the last two attempts to acquire what is the largest distribution and transmission system in Texas.

Sempra’s $9.45 billion bid won out after Berkshire refused to get into a bidding war and stood firm on its $9 billion all-cash consideration that implied an equity value of approximately $11.25 billion for 100% of Oncor.

Now, San Diego-based Sempra has to gain the approval of the Public Utility Commission of Texas, and Commissioner Ken Anderson is raising concerns on the amount of money Sempra will have to raise in order to finance the deal and the credit rating of the company.

The PUC has to rule on whether the Sepra deal is in the public’s interest, and on October 5, Moody’s Investors Service issued a comment titled “Sempra Energy: Revised structure for EFH/Oncor acquisition reduces complexity but transaction remains credit negative.”

Credit negative is not the case with Berkshire. Certainly, financing a deal is not a problem for Berkshire, as it is sitting on over $100 billion in cash that it has been hard-pressed to invest as of late.

Commissioner Anderson’s concern is a valid one, as Oncor has been mired in the decade long financial morass that found its parent company Energy Future Holdings Corp. in bankruptcy after being loaded with $40 billion in debt from a leveraged buy-out engineered by private equity firms KKR & Co. and TPG.

While it’s a longshot that Berkshire can get another shot at Oncor, perhaps a very long shot, the one thing Texas ratepayers need at this point is financial stability.

© 2017 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.

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Minority Stock Positions Stock Portfolio

BYD in Talks to Bring SkyRail Monorail to Egypt

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New energy technology company BYD is negotiating to bring its SkyRail monorail to the ancient Egyptian port city of Alexandria, the country’s second largest.

The proposed project will be planned for the construction of a 128 kilometer track. The potential collaboration comes four years after Alexandria local authorities began exploring options to relieve their city of chronic traffic jams.

“Strategic Partnership,” Said General Engineer / Khaled Eleiwa, “BYD has a very strong reputation and reliable image especially in Egypt, we are so glad to have such kind of cooperation step with BYD, and we hope to see the SkyRail operates in Alexandria as soon as possible”.

“BYD’s SkyRail is a clean, affordable and safe way for people to commute. It also utilizes limited road space in towns and cities while minimizing disruption to local communities,” said AD Huang. “Today’s cooperation is a step towards developing wider partnership that we have maintained with Egypt over the past 13 years”.

BYD’s SkyRail is substantially cost saving and quicker to construct compared to a subway, requiring only a fifth of the cost and one third of the construction time. BYD has conducted feasibility studies in more than 100 cities worldwide including the city of Iloilo in the Philippines, and has entered into strategic partnerships with over 10 cities in China. SkyRail is currently operating in Yinchuan, an industrial city in China’s northwest. Construction of BYD SkyRail lines are also expected to begin in 20 cities in 2018.

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 is now worth roughly $1.8 billion.

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

© 2017 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.

Categories
Minority Stock Positions Stock Portfolio

BYD Gets Big Order for its New Midibus from Holland’s Connexxion

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Chinese battery and vehicle manufacturer BYD reports that Connexxion has ordered 21 units of its new Midibuses for use in the north part of North Holland. The new fleet will deliver a service in largely rural areas during the daytime.

Delivery of the Midibuses and the start of operation is scheduled in the summer of 2018. The new BYD model takes BYD Europe into a new market sector and augments the BYD ebus range which includes single deckers up to 18m longer, double deckers and an electric coach.

The Midibuses ordered by Connexxion have an overall length of 8.75m, two doors and have seats for 26 passengers (with a total capacity of about 50).

According to BYD, this is believed to be one of the largest orders for heavy duty pure electric midibuses in Europe and is certainly the first significant one to be placed by a Dutch operator.

Eric van Eijndhoven, Managing Director of Public Transport for Connexxion, said: “We chose BYD due to its proven and leading electric bus and battery technology. We are delighted to be the first user of this important new model and know our passengers will enjoy the new levels of green performance the buses will deliver.“

Isbrand Ho, BYD Europe’s Managing Director, said: “This is great news which confirms the attractiveness of our new model which brings big bus features to the midibus sector. This is a real bus with all the reliable, heavy duty features operators expect but smaller than our other ebuses and of course totally emissions free.”

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 is now worth roughly $1.8 billion.

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

© 2017 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.