OMAHA, NE — Investor Warren Buffett, reported to be one of the world’s wealthiest individuals, has made his first venture into the coatings manufacturing industry with a bid to acquire the owner of one of the oldest and best-known brands in the architectural paint business — Benjamin Moore & Co. of Montvale, NJ.
Benjamin Moore and Buffett’s Berkshire Hathaway Inc. announced a definitive merger agreement, valued at approximately $1 billion, under which a wholly owned subsidiary of Berkshire Hathaway has submitted a cash tender offer of $37.82 per share for the outstanding common stock of Benjamin Moore, with the tender offer commencing on Nov. 17.
Buffett said Berkshire Hathaway, based in Omaha, is ”extremely excited about the opportunity to add a company with such an outstanding reputation for quality and leadership in its industry to the Berkshire group.” Buffett has a reputation of acquiring well-run companies boasting strong brand-name recognition.
Upon successful completion of the tender offer, Benjamin Moore would become a wholly owned subsidiary of Berkshire Hathaway and will continue to be headquartered in Montvale, NJ, the companies said. The merger agreement has been unanimously approved by Benjamin Moore’s board of directors.
In a statement issued by Benjamin Moore, Chairman Richard Roob and President and CEO Yvan Dupuy said the merger agreement “offers the dual benefit of providing fair value for our shareholders and continuity of the company as a distinct entity.”
The tender offer is subject to certain conditions, including the tender of not less than two-thirds of Benjamin Moore’s outstanding common stock, on a fully diluted basis, and the obtaining of necessary governmental approvals.
Benjamin Moore, a major manufacturer and retailer of premium architectural paints, stains and industrial coatings, was founded in 1883. Earlier this year, the company launched a restructuring program for its U.S. and Canadian operations, including the closing of three manufacturing facilities and the conversion of four facilities from manufacturing to distribution operations. The moves reduced the number of manufacturing facilities nearly in half, from 15 to eight, and consolidated manufacturing for the company’s Technical Coatings Co. subsidiary at a plant in Melrose Park, IL.
The company reported 1999 net income of $78 million, a 29.9% increase from 1998, as net sales rose 9.6%, to $779.5 million.
Berkshire Hathaway is a holding company that owns a number of subsidiaries involved in diverse business activities, including insurance, financial and retail businesses. Some of the subsidiary companies are Dexter Shoe Co., Executive Jet, GEICO Direct Auto Insurance, Helzberg Diamonds, International Dairy Queen Inc., and See’s Candies.