Berkshire Hathaway Inc, to acquire 60 per cent of Pritzker Family Company, Marmon Holdings

26 December 2007

Warren Buffett, CEO, Berkshire Hathaway and Tom Pritzker, chairman, Marmon Holdings, have announced that Berkshire will purchase 60 per cent of Marmon Holdings, Inc, a private company owned by trusts for the benefit of members of the Pritzker Family of Chicago, subject to customary closing conditions, including regulatory approvals.

The closing is anticipated to occur in the first quarter of 2008. Prior to closing, Marmon will make a substantial distribution of cash and certain assets to the selling shareholders. At closing Berkshire will acquire 60 per cent of Marmon for $4.5 billion. The remaining 40 per cent will be acquired through staged acquisitions over a five to six year period for consideration to be based on the future earnings of Marmon..

Marmon is a private company that was acquired in 1953 by two brothers, Jay and Robert Pritzker, when it was a small, ailing manufacturing operation in Ohio. In 2002 Jay's son Tom became chairman of Marmon. He then recruited John Nichols to become CEO of Marmon and in 2006 John was succeeded by Frank Ptak who is currently CEO of Marmon.

The Marmon Group is an international association of more than 125 manufacturing and service businesses that operate independently within diverse business sectors in wire and cable, serving energy related markets, residential and non-residential construction and other industries; transportation services & engineered products, including railroad tank cars and intermodal tank containers; highway technologies, primarily serving the heavy-duty highway transportation industry; distribution services for specialty pipe and tubing; flow products for the plumbing, HVAC/R, construction and industrial markets; industrial products including metal fasteners, safety products and metal fabrication; construction services, providing the leasing and operation of mobile cranes primarily to the energy, mining and petrochemical markets; water treatment equipment for residential, commercial and industrial applications; and retail services, providing store fixtures, food preparation equipment and related services.

Member companies employ approximately 21,000 people and operate more than 250 manufacturing, distribution and service facilities, primarily in North America, the United Kingdom, Europe and China. Collective revenues total approximately $7 billion.

Between 2002 and 2007 Marmons operating income more than tripled. During that same period operating margins increased from 4.9 per cent to 12.4 per cent.