Mergers & Acquisitions Investors Would Love to See: Berkshire Hathaway (BRK.A) and John Deere (DE)
Seller: Deere & Company (NYSE:DE)
Warren Buffett said at the Berkshire Hathaway annual meeting earlier in May that he wants to make a big acquisition, but much like VF, he and partner Charlie Munger have found very few compelling deals.
Munger suggested at the meeting that Berkshire Hathaway could make a deal as large as $150 billion if it used some debt and/or sold some of its equity holdings.
Buffett’s son Howard is a farmer. Nobody would know Deere & Company as well as the future chairman of its board.
Buffett owned DE stock until Q4 2016 when Berkshire Hathaway dumped its entire position. As of the end of September 2016, Berkshire Hathaway had owned $1.8 billion in Deere stock. Perhaps at 24 times earnings, he felt the maker of tractors and combines was priced for perfection.
Deere wouldn’t be a $150 billion deal by any means, but it would be one of his biggest. The fact that he sold out of Deere stock doesn’t leave me very hopeful, but never say never.
Deere is an American icon like the Oracle himself.