DAVOS, Switzerland— Warren Buffett’s Berkshire Hathaway has been building its stake in the five largest Japanese general trading companies since disclosing an increase in ownership last summer, according to Masayuki Hyodo, CEO of Sumitomo Corporation, one of these companies.
Berkshire Hathaway had previously stated that it may further increase its holdings in the future, but was committed to not purchasing more than 9.9% of any of the five companies without board approval.
According to Hyodo, Berkshire’s share in these trading companies is increasing every day. He mentioned that this is not only true for Sumitomo, but for all five companies as well.
Berkshire Hathaway has not provided any official comment on these developments when approached by ‘s.
It was reported that Berkshire sold 122 billion yen ($837 million) worth of yen-denominated bonds in November. This move was speculated to be a means to raise cash for potential investments in Japan.
The holdings of Berkshire consist of the five largest sogo shosha (general trading companies), which are significant conglomerates with a long history and a significant influence on the Japanese economy. These companies have diverse interests across various sectors including natural resources, energy, chemicals, metals, manufacturing, retail, real estate, and healthcare.
Berkshire’s Successful Ventures in Japan
Berkshire Hathaway, led by the legendary investor Warren Buffett, has made notable investments in Japanese businesses. Alongside Mitsubishi, Mitsui, Itochu, and Marubeni, Berkshire owns Sumitomo, representing combined stakes worth approximately $20 billion as of June. This investment has proven to be highly lucrative for Buffett, with the five stocks more than doubling in value on average since Berkshire acquired them in 2020.
The Japanese stock market has been flourishing, recently reaching its highest levels since 1990. Buffett and Berkshire executive Greg Abel, who is considered Buffett’s potential successor, visited Japan last year and expressed their satisfaction with the investments. In fact, Berkshire stated in June that they aim to eventually own 9.9% of each of the five companies, emphasizing that the aggregate value of these investments surpasses Berkshire’s holdings in any other non-U.S. country.
Berkshire initially positioned its Japanese investments for the long term, drawing parallels to its enduring passive interests in U.S. companies like Coca-Cola, which Buffett has held for over three decades.
Hyodo had the opportunity to meet Buffett during his visit to Japan last year. Their conversation covered Sumitomo Corporation’s history and business practices. Reflecting on the meeting, Hyodo shared that Buffett left him with a single word: “exceptional.”