Earlier I had posted a message about Mars. What do ya'll think, seriously, Buffett has the cash and Mars is a huge name has an easy to understand product. It could be a real cash cow and it would give Buffett something to do with all that dough thats just sitting around. Really it all depends on whether or not the Mars family wants to sell.
Mars would be a wonderful acquisition, but I'd be surprised if it ever happened. I'd bet the Mars family would hire legions of investment bankers whose sole job would be to maximize the sale price and so they'd probably try to initiate a bidding war. That's not Buffett's cup of tea. Nestle's, Phillip Morris, or some other huge food company with a world-wide distribution system would no doubt pay a very fancy price for Mars and I just don't think Warren would be willing to pay top dollar.
If he could convince the family that diversifying into Berkshire at a a reasonable price, he might pay stock. But I just don't think he could talk the Mars family into it when investment bankers are whispering in their ears, even though they should. For them that would be the smartest long-term move.
"I would guess Mars is worth at least 20 billion"
Maybe not that much, although I don't know if anyone knows what their profit margins are. HSY has about 30% of the US confectionary market, including candy, mints, and gum, according to S & P. HSY's equity market cap is $9.5 billion, about twice sales. They also have about $1 billion in debt, so total value of $10.5 billion.
The one to have bought, IMO, is WWY. We could have bought the whole company for about what we paid for a small interest of KO, at the time we bought KO, assuming the WWY family even would have sold. No bottlers to worry about either.
WWY is really a well managed company, IMO, with a specialty product, not diversified like HSY and Mars, HSY in particular which sells across various categories. HSY and Mars, BTW, don't have remotely the same international success as WWY either, because chocolate tastes around the globe vary region by region.
Yes, Mars is probably worth 20 billion, thats why Warren may like it, because it is his league(elephant). Why wouldn't Mars want to sell, pocket 20 billion and retain a 10 or 15% equity stake. That would be great, I'd eat even more choclate than I do now. Personally, I have seen written in several reports that Buffett is attracted to the utility business. I think a outfit like Kinder Morgan(KMI) or Williams(WMB) would be up his alley.
Bandag is right up WB's alley, controlled by the Carver family, and is drowning in cash. The Carvers are extremely smart, and will not sell cheap like many C.E.O.'s. I am long BDG, and hope to keep it "forever"
Hello rrb. I have a little interest in Mars and in confectionaries and baking in general, but I don't have any contributions to make to your discussion-to-be.
But don't let the lack of response discourage you. It often happens that a good idea is one that hasn't occurred to anybody else yet, and so nobody has anything to say. (I try not to let that stop me ...)
Anyhow- Sounds like a good thought. How would you interest WEB?
Best to you,