Buffett eyes acquisition and keen to cut cash

Warren Buffett told shareholders he wanted to reduce Berkshire Hathaway's cash pile as he looks for more profitable places to…

Warren Buffett told shareholders he wanted to reduce Berkshire Hathaway's cash pile as he looks for more profitable places to put the company's money, and that there was a small chance he would make a $15 billion acquisition.

The chairman and chief executive, speaking at Berkshire's annual meeting, also said that he sees the dollar weakening further but said he reduced his stake in foreign currency contracts because there were better ways of avoiding damage to company profits.

The billionaire investment legend said Berkshire would ideally like to shrink the cash pile to about $10 billion, from about $40 billion currently.

Speculation has mounted of late about what Mr Buffett will do with insurance-to-ice cream conglomerate Berkshire's cash.

READ MORE

On Friday, Berkshire said it would use some cash to boost its international presence, announcing it would buy 80 per cent of Israel's Iscar Metalworking in a transaction valuing the closely held tool firm at $5 billion.

The disclosure that there is a low probability that Mr Buffett could make a large acquisition may fuel speculation about possible targets. He did not identify the target or say if it was in the US or abroad.

Berkshire is diversifying through foreign acquisitions or taking holdings in companies with substantial operations overseas. Mr Buffett said he plans for Berkshire to have a "fair amount" of earnings power coming from abroad.

He said he expects more opportunities for acquisitions in the utilities field. In March, Berkshire's MidAmerican Energy Holdings Co. unit acquired the western U.S. utility PacifiCorp from Scottish Power for $5.1 billion in cash.