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FACTBOX-Berkshire's Buffett on succession, acquisitions

 May 1 (Reuters) - Berkshire Hathaway Inc BRKa.N BRKb.N,
the insurance and investment company run by Warren Buffett, has
been preparing succession plans for when the 78-year-old
billionaire steps down. It also still hunts for acquisitions,
preferably large.
 In 2008 Berkshire spent $6.1 billion on acquisitions. It
spent $4.5 billion for a 60 percent stake in Marmon Holdings
Inc, which was owned by the Pritzker family of Chicago and
makes such things as railroad tank cars, plumbing pipes, metal
fasteners, and wiring and water treatment products used in
residential construction. Berkshire later boosted its stake to
63.6 percent.
 Berkshire also made a series of large investments in 2008,
including $6.5 billion to help fund Mars Inc's purchase of
chewing gum company Wm Wrigley Jr Co. It also invested $5
billion in Goldman Sachs Group Inc GS.N and $3 billion in
General Electric Co GE.N.
 Berkshire ended 2008 with $25.54 billion in cash. Buffett
has repeatedly said he would like to keep $10 billion on hand.
 The company is holdings its annual meeting on Saturday in
Omaha, Nebraska. For a preview of the annual meeting, please
click [ID:nN29413128]
 The following information about Buffett's succession plans
and Berkshire's acquisition strategy is drawn from the
company's 2007 and 2008 annual reports:
BUFFETT ON HIS POTENTIAL SUCCESSORS (FROM 2007 REPORT)
 "We have for some time been well prepared for CEO
succession because we have three outstanding internal
candidates. The board knows exactly whom it would pick if I
were to become unavailable, either because of death or
diminishing abilities. And that would still leave the board
with two backups.
 "We have indeed now identified four candidates who could
succeed me in managing investments. All manage substantial sums
currently, and all have indicated a strong interest in coming
to Berkshire if called. The board knows the strengths of the
four and would expect to hire one or more if the need arises.
The candidates are young to middle-aged, well-to-do to rich,
and all wish to work for Berkshire for reasons that go beyond
compensation."
ACQUISITION CRITERIA (FROM 2008 REPORT)
 "We are eager to hear from principals or their
representatives about businesses that meet all of the following
criteria:
     (1) Large purchases (at least $75 million of pretax
earnings unless the business will fit into one of our existing
units),
     (2) Demonstrated consistent earning power (future
projections are of no interest to us, nor are 'turnaround'
situations),
     (3) Businesses earning good returns on equity while
employing little or no debt,
     (4) Management in place (we can't supply it),
     (5) Simple businesses (if there's lots of technology,
we won't understand it),
     (6) An offering price (we don't want to waste our time
or that of the seller by talking, even preliminarily, about a
transaction when price is unknown).
 "The larger the company, the greater will be our interest:
We would like to make an acquisition in the $5-20 billion
range... We will not engage in unfriendly takeovers... We
prefer to buy for cash, but will consider issuing stock when we
receive as much in intrinsic business value as we give."
 (Reporting by Jonathan Stempel in Omaha, Nebraska)


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