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Berkshire to acquire 60% stake in Marmon

December 26, 2007|From Reuters

Berkshire Hathaway Inc., the conglomerate headed by billionaire investor Warren E. Buffett, said Tuesday that it planned to buy 60% of manufacturing and services group Marmon Holdings Inc. for $4.5 billion.

Privately held Marmon is an international association of more than 125 businesses in sectors including wire and cable, transportation services and industrial products. Its collective revenue totals about $7 billion.

Omaha-based Berkshire said it would acquire the remaining 40% through staged acquisitions over a five- to six-year period depending on Marmon's future earnings.

Before closing, Marmon will distribute a substantial amount of cash and certain assets to selling shareholders, Berkshire said in a statement.

Marmon is owned by trusts for Chicago's Pritzker family, which is best known for starting the Hyatt hotel chain. Jay and Robert Pritzker bought Marmon in 1953, and Jay's son Tom became chairman in 2002.

"Our transaction was done just the way Jay would have liked it to be done -- no consultants or studies," Buffett said in the statement.

The deal is subject to closing conditions, including regulatory approvals.

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