Iscar Chairman Eitan Wertheimer said Saturday that the acquisition of 80 percent of his father's company by investment mogul Warren Buffett for USD 4 billion attests to the strength of Israel's economy.
The official declaration of the deal was made at the annual meeting of Buffett's insurance and investment company Berkshire Hathaway Inc being held in Omaha, Nebraska, where 23,000 shareholders congregated to hear Buffett speak.
“As a member of the Berkshire family we'll have the benefit of a strong platform that's committed to continuing our historical success,“ said Wertheimer. “This transaction is not only significant for our company, our customers and our employees, but also for our industry, and for the State of Israel. We are gratified by Berkshire's investment in the group, and proud of what we have achieved since Iscar's founding more than 50 years ago by my father Stef Wertheimer, who will continue to lend his vision to the group. We are looking forward to a long and profitable partnership with Berkshire Hathaway.“
“This acquisition ties the knot between Berkshire Hathaway, one of America's outstanding businesses, and IMC, an extraordinary industrial company with a truly global reach, and a presence in the world's most dynamic regions and economies,“ said Jacob Harpaz. “We believe that our partnership with Berkshire will further strengthen our position in the North American market and worldwide and allow us to continue the phenomenal growth that we have experienced over the past 50 years.“
Wertheimer said that Iscar will keep its profit records confidential despite being purchased by Buffett's Berkshire which appears on the New York Stock Exchange. "Buffett's company is so large that one cannot identify in its reports even details that everyone in Israel knows," he said.
He said Iscar's decision to conceal market details is out of fear that such move might expose the secret of its success to competitors.
Berkshire Hathaway Inc., said it would buy 80 percent of Iscar in a transaction valuing the closely-held tool firm at USD 5 billion. The Wertheimers will earn USD 4 billion from the deal and hold on to 20 percent of the company's assets.
Estimates are that the transaction will earn the State's coffers close to USD 1 billion. Wertheimer said most of the USD 3 billion he and his father will earn will be invested in new ventures, while the rest of the cash will be spent on "projects for the country and the region" and his father's philanthropic work.
Iscar is the world's second largest metalworking tools manufacturer with an annual turnover estimated at USD 1 billion. About 2000 employees work at its headquarters in Tefen, where an average 15 percent annual growth has been registered every year.
The deal is the third largest acquisition ever carried out by Buffett outside the United States.