Warren Buffett's Berkshire Hathaway to Increase Ownership in Japanese Trading Houses
Berkshire Hathaway, led by billionaire investor Warren Buffett, plans to expand its ownership stake in five Japanese trading houses.
In his annual letter to shareholders, Buffett disclosed that Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo have agreed to relax ownership limits below 10%. As of December 2024, Berkshire's investments in these companies totaled $23.5 billion.
Buffett anticipates an incremental increase in Berkshire's ownership over time. The 94-year-old investor and his designated successor, Greg Abel, emphasize their focus on long-term investments.
Known as "sogo shosha," Japanese trading houses engage in a wide range of trading activities, including materials, products, and food. They play a crucial role as intermediaries and provide logistical support, with deep involvement in commodities, shipping, and steel.
Berkshire's initial investment in the trading houses in 2019 was driven by their attractive financials relative to their low share prices. Buffett drew parallels between the trading houses and Berkshire, noting their strategic alignment.
Berkshire has allocated $13.8 billion to its current holdings and projects $812 million in dividend income for 2025. Analyst Cathy Seifert views the investment as a value opportunity, highlighting Berkshire's strong relationships with the trading houses.
While Berkshire has issued yen-denominated bonds, Buffett emphasizes the company's pursuit of "currency neutrality" and the absence of a specific view on future currency changes. Notably, Berkshire reported foreign currency gains of $1.15 billion after taxes in 2024.