Lubrizol is a company that provides specialty chemicals for the transportation, industrial and consumer markets. It was founded in 1928 and is based in Wickliffe, Ohio. Lubrizol`s markets include beauty and personal care, electronics, energy solutions, healthcare and more. The company employs more than 8,800 people in more than 100 countries. More recently, the company has taken sustainability initiatives, such as reducing vehicle emissions by more than 50% by 2040. Lubrizol was acquired by Berkshire Hathaway in 2011 for $9 billion. So there are fewer and fewer companies competing for the same pie, with the best companies devouring an ever-increasing percentage of profits. But does the industry`s higher concentration really lead to tangible benefits? A fascinating study by Gustavo Grullon, Yelena Larkin and Roni Michaely entitled “Are Industries Becoming More Concentrated?” sheds light on the subject. The study concludes that the more concentrated an industry is, the higher the return on assets. More importantly, he determined the source of higher returns that “higher returns on assets are largely driven by companies` ability to generate higher profit margins.” Since the effect is very large, we can only conclude that oligopolies actually mean that companies can focus less on competition and more on their bottom line.
Warren Buffet is CEO of Berkshire Hathaway, a multinational holding company. It owns more than 60 companies and has significant investments in various companies. Parent company companies include Geico, Fruit of the Loom, Duracell, Dairy Queen and Forest River RV. Its most recent acquisitions of Jayco and Hymer (their first international acquisition and the largest in the company`s history) took place between 2016 and 2018. Warren Buffett is widely regarded as one of the brightest and most successful investors of all time. While his company, Berkshire Hathaway, was originally a textile manufacturer, Buffett didn`t build his fortune with fabric. Instead, he became wealthy with long-term investments in publicly traded companies. It produces motorhomes, travel trailers, fifth wheel hitches, toy tractors and target trailers. In 2005, Warren Buffet bought Forest River, Inc., just seven days after hearing about the company. Berkshire Hathaway is the holding company that owns Forest River, Inc., and Forest River RV is a division of Forest River, Inc.
Which essentially makes Warren Buffett the owner of Forest River RV. Charter Brokerage, a provider of drawback services, describes itself as “the leader in drawback collection.” The company is also a customs broker. If you are not familiar with the disadvantages, it is the refund of duties, taxes and fees when importing goods. In other words, it helps businesses recover some of the costs they have to pay when importing goods. It is the leading provider of refunds and has filed more than 90 percent of eight-figure refund claims since 1994, according to its website. Charter Brokerage was founded in 1994 and acquired by Berkshire Hathaway in 2014. Central States Indemnity Company is based in Omaha, Nebraska, and offers affordable Medicare supplemental insurance. It also offers special products for life, disability and unemployment for individuals. Central States Health & Life Co. of Omaha (CSO) was founded in 1932, which in turn formed CSI in 1977. In 1992, CSI was acquired by Berkshire Hathaway. The company`s mission is to “simplify and insure the financial obligations of our customers”.
It is allowed in all 50 states as well as the District of Columbia, Guam and Puerto Rico. The only speed threshold here is that Buffett may already be too deep in the RV market. Would owning a diverse RV supermarket concept – directly or as a small shareholder – be a problem for a company that is already an RV manufacturer? Camping World also has the Good Sam Club, the equivalent of the American Automobile Association (AAA) RVs with more than 2 million card-holding members. Will owning an RV insurer constitute a conflict of interest for the Good Sam Club? Marmon Holdings, or Marmon Group, is a holding company consisting of more than 100 industrial companies. It was founded in 1953 by Jay Pritzker and Robert Pritzker in Chicago, where it is still headquartered today. Companies produce transportation equipment, electrical components and other industrial components. It also produces tank cars, which are mainly used for transporting liquids by rail. In 2020, sales exceeded $7.6 billion. Berkshire Hathaway acquired 60% of Marmon in 2007 and the remaining 40% in 2013. Johns Manville manufactures roofing, insulation and technical products. It also manufactures commercial roofs, fibers and nonwovens.
Founded in 1858, the company is based in Denver. The company has annual sales of more than $3 billion and is a leader in all key markets. In addition, the company employs more than 8,000 people in 46 markets, including Europe and China. Interesting fact: there is a town called Manville, New Jersey named after Johns Manville. The company was acquired by Berkshire Hathaway in 2001. Berkshire Hathaway generated revenue of $245.5 billion and net worth of $873.7 billion in 2020. In addition, the company has grown by an average of 19% per year. With all the growth and revenue, Berkshire was able to acquire entire companies instead of just investing in them. Disclosure: I am/we are long BRK.B. I wrote this article myself, and it expresses my own opinion.
I don`t get any compensation for this (except for Seeking Alpha). I have no business relationship with a company whose shares are mentioned in this article. They first bought Airstream to capitalize on an already thriving RV product and market, which gave them the opportunity to grow quickly and help the company succeed. Garan Incorporated is the company behind the Garanimals brand. So what is Garanimals? It is a brand of baby and children`s clothing sold exclusively by Walmart. You can find it both online and in stores. The brand has been around since 1972 and Garan Inc. is based in New York City. It was acquired by Berkshire Hathaway in 2002 and has been sold exclusively by Walmart since 2008. And behind the successful business is one of the richest people in the world.
Its financial backing and knowledge of the growing industry puts Forest River in a competitive position in RV manufacturing. “Like most people who buy RVs, Warren Buffett made his decision quickly. He heard about Forest River in the summer of 2005 and bought the company seven days later,” Bloomberg reported. It turned out that Berkshire Hathaway owner Warren Buffett received a fax from Forest River owner (Pete Liegl) essentially stating that Forest River met all the criteria of Berkshire Hathaway`s acquisition requirements. It took just three months for a transaction to close and the company to be sold to Berkshire Hathaway on August 31, 2005. Well, chances are he owns the company that made your RV. Curious to know more? Read on to learn more about Warren Buffett and what VR company he owns. Thor recently agreed to acquire Erwin Hymer Group, which is the leading motorhome manufacturer in Europe (on a sales basis). The acquisition will increase Thor`s size and give it a strong position in the European market.
This is unlikely to impact the duopoly situation in North America well beyond the small portion of Hymer`s North American sales and also through indirect design/technology and cost synergies. But it can be argued that the European RV market is also an oligopoly, with Hymer being the largest player with nearly 30% of the industry. The European RV market may not be as consolidated as in the US, but Thor is still primarily a North American company and could also benefit from further consolidation in Europe. FlightSafety International offers training for business, regional and commercial aircraft.