What Will Buffett Buy in Europe?

On April 22, CNBC reported that Warren Buffett is going to Europe to look at businesses.

Buffett told CNBC

My goal is to get on the radar screen of large family-owned companies in Europe, that for one reason or another, need an ownership change, but want the business to be run as it was under the family.

In the US, Berkshire Hathaway (BRK.A) (BRK.B) has a reputation of buying companies to hold for life. Berkshire Hathaway will always retain ownership of its subsidiaries and, unless a company is in an industry where they will keep making losses in perpetuity, the company will not be shut down. Berkshire lets a company run the way the founder used to run it. For this reason a lot of owners of private companies in the US have entrusted their life's work to Berkshire. Since the founders are more interested in the welfare of their employees, the happiness of their customers and preserving their legacy they will typically sell only to Berkshire Hathaway and will do so at a fair price or even a discount to what they would get in the market.

After the purchase of ISCAR metalworking, a company based in Israel, Buffett has realized there are wonderful companies all over the world that he could buy if Berkshire Hathaway and its culture was better known outside the US.

The Search

I went through Forbes' Billionares list and selected these companies based on the following criteria

1. Company is based in Europe - Obvious since Buffett is visiting Europe
2. Company is not listed or is majority owned - Buffett is looking for family owned businesses
3. The current owner is older than 70 - Someone who wants to preserve his life work.
4. Net worth of the owner is greater than 2.5 billion - This makes the business large enough to be interesting for Berkshire.
5. Excluded companies which only own investments and/or real estate holdings.
6. Excluded industries which Buffett has said he sees no future in or does not understand, eg: Newspapers, Publishing, Biotechnology

The age of 70 and net worth of 3 billion are somewhat random numbers I pulled out of my hat to narrow the search. There could be smaller companies or companies run by younger individuals who might be on Buffett's radar.

The Candidates

The companies based on my criteria are listed below. The companies in bold are those I feel Warren Buffett might be most interested in.

• Ikea a Furniture Retailer owned by Ingvar Kampard (81)
• Aldi a grocery Retailer owned by Karl Albrecht (88) and Theo Albrecht(85)
• L’Oreal the world’s largest Beauty Products company owned by Lilane Bettencourt(85)
• Tetra Laval a packaging business owned by Birgit Rausing & family(84)
• Ferrero SpA a Food business owned by Michele Ferrero & family(81)
• Dassault an Aviation business owned by Serge Dassault & family(82)
• Bertelsmann a Media business owned by Reinhard Mohn & family(86)
• Wurth Group a Fastners business owned by Reinhold Wurth(72)
• Corticeira Amorim the worlds largest cork company owned by Americo Amorim(73)
• Tengelmann Group a retail trade business owned by Erivan Haub & family (76)
• Deichmann-Schuhe GmbH a shoe retailer owned by Heinz-Horst Deichmann
• Helm AG a Chemicals company owned by Hermann Schnabel(86)

Disclosure: I own shares of Berkshire Hathaway