This chapter looks at investees—companies in which Berkshire has a minority interest. Investees may fail, be acquired, reorganize, or become marketable securities that Berkshire sells or trades. Among Berkshire’s former investees which no longer exist due to merger or other corporate mortality are Beatrice Foods, Capital Cities/ABC, F. W. Woolworth, General Foods, and Knight Ridder. Among those Berkshire has sold are Freddie Mac, Kraft Foods, and McDonald’s. Today, 80 percent of Berkshire consists of subsidiaries and only 20 percent investees. Berkshire’s investee portfolio is like a business unit within Berkshire equivalent to a large subsidiary. While investees do not define Berkshire culture, their purchase and sale reflect Berkshire’s values, and many boast strong cultures, big personalities, and fascinating histories. Of particular significance are two of the oldest (Washington Post and Gillette, now Procter & Gamble), two of the largest (CocaCola and Walmart), and two of the most opportunistic (Goldman Sachs and USG). For a glimpse into the future, the chapter also considers another candidate for full acquisition—Heinz—and the novel partnership Berkshire made with a private equity firm to acquire half of it. At 50 percent, Heinz is neither an investee nor a subsidiary, and the transaction defines a new model for the next generation of Berkshire deals.
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