In English, with a little Hebrew.Buffett acquisition of Wertheimer's Iscar puts Israel on the investment mapIn the largest ever buy-out of an Israeli company, American investor Warren Buffett has paid $4 billion for an 80% stake in Iscar Metalworking, an industry leader in metal-cutting tools. "We are investing $4 billion in an amazing band of people from Israel," Warren Buffett said in an interview. "If your readers know a company that resembles Iscar, even a little, have them call me immediately. I want to buy. Let them call me collect." Buffett, considered the 2nd wealthiest man in the world after Microsoft's Bill Gates, said he intended to visit Israel later this year, not only to visit Iscar headquarters, but also to see if there were "any other pearls out there." The purchase is the largest Buffett has ever made outside the US. He told Yediot Aharonot that "I believe in the Israeli market and the Israeli economy and I think that this is a good time to invest in it." According to Israeli venture capitalist Jonathan Medved, the deal puts Israel on the international map for future investments. "One cannot overestimate the importance of this investment on the Israeli economy. Every superlative is an understatement. There is no investor who speaks to the world, or to the US investor, like Warren Buffett. He is legendary," Medved said. "He is as conservative and cautious an investor as you can find. Here he is making his first major investment outside the US, and he chooses Israel. That speaks volumes about the opportunities here not only in high tech, but also in the more traditional businesses." Medved believes that Buffett's investment will have a ripple effect on the Israeli economy. "He is a smart leader - people watch him. I've already heard other fund-managers say: If Buffett sees something in Israel, I'd better get over there and see what's going on. Without question this will bring a lot of attention and investment in its wake." Buffett, chair and CEO of Berkshire Hathaway said that "in another five or ten years, we'll look back and understand that what we declared here is one of the most significant things Berkshire Hathaway has ever done. The news of the acquisition has caused waves of excitement in both the business and political realm in Israel. "This is major news and a great present for the State of Israel. We salute you, both personally and on behalf of the entire State of Israel. This sale will provide great momentum to the Israeli economy and I am certain that it will lead to other economic benefits," Prime Minister Ehud Olmert told Iscar's Chairman of the Board Eitan Wertheimer. Olmert added at the beginning of Sunday's cabinet meeting that "this is not just another deal for the Israeli economy, this is one of the biggest investors in the world, who has never invested outside the US before. He represents tens of thousands of investors whose investments depend on his decisions. His decision to invest in an Israeli company, in a country that he has never visited or seen its factories, solely on the basis of its record and on professional opinions attests - first and foremost - to great confidence in the Israeli economy and in full trust both in its stability and in its great potential. "When a man like Warren Buffett says, to the 25,000 important economists and business people who have come to listen to him, that he believes in the Israeli economy, this is a signal to tens of thousands of investors from around the world to do what is good for them. What is good for $4 billion of Warren Buffett's money is also good for very many other investors and we can only rejoice."After fleeing Nazi Germany the grade school dropout joined the Palmach, the elite strike force of the Haganah (the pre-state defense organization). Vice Prime Minister Shimon Peres, called Stef Wertheimer and told him that, "this transaction reflects foreign investor confidence in Israel's economy, and especially in the economic future in the Galilee."According to Medved, the deal with Buffett shatters many myths that have been established about the Israeli economy. "The deal is an eye-opener. It confounds traditional wisdom in many ways," said Medved, who went on to cite several "myths" about the Israeli economy that have been shattered by Buffett's investment. "First, [the myth] that there is nothing interesting in Israel besides high tech," says Medved, noting that Iscar is not a high tech firm. "Second, that a cautious investor will be too scared to invest in Israel because of the political risk. If issues of political risk were there, then a cautious conservative investor like Buffett would not have made this investment. Third, that even if Israel excels in high tech, it does not have world-class management," he says, pointing out that not only did Buffett chose to keep the Israeli management of Iscar intact, he heaped praise on it. [Mehr] [Weniger] |
