Berkshire Hathaway Inc, the conglomerate headed by billionaire investor Warren Buffett, said on Tuesday, it planned to buy 60 per cent 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 revenues total about $7 billion. Berkshire Hathaway said it will acquire the remaining 40 per cent through staged acquisitions over a five- to six-year period for consideration to be based on Marmon’s future earnings.

Regulatory approvals

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

“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.

Buffett, 77, built Berkshire over four decades, buying out-of-favour stocks and manufacturers to transform a failing textile maker into a $210 billion holding company. His biggest investment last year was the $4 billion purchase of  Iscar Metalworking Cos. from Israel’s Wertheimer family.

Buffett will work with Tom Pritzker, Marmon Chief Executive Officer Frank Ptak and former Chief Executive Officer John Nichols over the next five to six years “in continuing to build Marmon,” Berkshire said in the statement.

The Pritzker family has discussed breaking up its holdings since the 1999 death of Jay Pritzker, who began the hotel company in 1957.  Marmon was acquired in 1953 by Jay and his brother Robert, according to the statement.
“This transaction is being done in the context of the previously reported restructuring of our family business interests,” Marmon Chairman Tom Pritzker said in the statement.