By Warren Giles and Josh P. Hamilton, 21 May 2008
May 20 (Bloomberg) -- Billionaire Warren Buffett said food companies, watchmakers and energy traders are among companies he would consider buying in Switzerland as he scours Europe for opportunities to expand his Berkshire Hathaway Inc.
``We're looking for businesses like Nestle that are quite understandable,'' Buffett, 77, told reporters in Lausanne, Switzerland, today. While Nestle SA, the world's largest food company, isn't on his list, Buffett said Switzerland has ``fine companies'' in which to invest.
Switzerland is the second stop on Buffett's four-city tour of Europe, where he hopes to someday buy family-owned businesses for his $200 billion Omaha, Nebraska-based Berkshire. Almost nine out of ten Swiss companies are family controlled, including Swatch Group AG, the world's biggest watchmaker, and Rolex SA.
Buffett, whom Forbes magazine calls the world's wealthiest man, isn't nearly as well known in Europe as he is in the U.S., where Berkshire's annual meeting drew 31,000 people this year. With just 19 employees at Berkshire headquarters and because he cuts the deals himself without the usual bankers and lawyers, Buffett says he needs potential sellers to call him.
Luxury watchmakers such as Geneva-based Rolex Group ``are great companies,'' Buffett said. ``They know my phone number, but they haven't called.''
Nicolas Hayek Sr., chairman of rival Swatch Group, has said his family, which owns 39.1 percent of the company, would prefer that Swatch not trade on the stock market. The family won't buy the rest of the company because they don't want to take on debt.
Tools, Fragrances
Other family-owned companies include Geneva-based Firmenich International SA, the biggest closely held maker of flavors and fragrances, and trainmaker Stadler-Rail AG. Hilti AG, a toolmaker based in neighboring Liechtenstein, was taken private by its founding family five years ago.
Buffett said he wouldn't be ``reluctant'' to invest in an energy trading company, without giving details. Switzerland is home to a number of trading companies, including closely held Glencore International AG, the world's largest commodity trader.
While Buffett said he would also consider buying a bank if he knows the banker running it, he criticized the large financial institutions caught in the subprime mortgage crisis for delegating risk management.
Shirking Responsibility?
``The head of any bank or financial institution has to be the chief risk officer,'' Buffett said. ``A great many financial institutions have been run by people who haven't taken that responsibility.''
Buffett owns about a third of Berkshire, which he built over four decades from a failing maker of men's suit linings into a company with businesses that range from candy-making to insurance and a $72.6 billion stock portfolio.
He's been looking for places to invest Berkshire's $35 billion in cash, investing in China, Israel and the U.K., because he says there's a dearth of U.S. investment opportunities for a company as large as Berkshire.
To contact the reporters on this story: Warren Giles in Geneva at wgiles@bloomberg.net; Josh P. Hamilton in New York at jphamilton@bloomberg.net
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