In a huge transaction for the Israeli economy, world famous investor Warren Buffett completed the purchase of Iscar from the Wertheimer family. Buffet had acquired 80 percent of the Israeli company in 2006. On Wednesday, Buffett's company, Berkshire Hathaway Inc., acquired the company's remaining 20% of shares for 2.05 billion U.S. dollars. "The most respected and important investor in the world is voting with his feet," said Eitan Wertheimer, Chairman of the IMC Group on Wednesday. "Israel is a good place to invest." Even after the acquisition, Wertheimer told reporters, the company will remain in Israel. "This isn't easy for us but it's the way of the world and it's an opportunity to move the company forward," said Wertheimer. The State of Israel will realize a direct benefit from the deal in the form of tax revenues of over one billion shekels. Iscar is a multinational company founded in 1952 by Stef Wertheimer in an old shack he rented. The company specializes in cutting tools for metal work, as well as blades for jet engines. Buffett, the fourth richest man in the world, earned his fortune through successful investments. In 2006, Berkshire bought the 80% stake in Iscar, whose formal name is IMC International Metalworking Cos, for $4 billion. At the time, that purchase was one of the largest acquisitions involving an Israeli company, and Buffett's biggest bet outside the United States. Wednesday's purchase suggests that Iscar's value has since more than doubled. "As you can surmise from the price we're paying for the remaining interest, IMC has enjoyed very significant growth over the last seven years," Buffett said in a statement. The acquisition was announced three days before Buffett will welcome more than 35,000 people to Berkshire's annual meeting in its hometown of Omaha, Nebraska. In his annual letter to shareholders on March 1, Buffett described Iscar as one of Berkshire's five most profitable companies outside its insurance businesses. While Berkshire does not break out Iscar results separately, it said the Tefen, Israel-based unit's profit fell in 2012 because of slowing economic conditions in some non-U.S. markets. A year ago, Buffett in his shareholder letter described Iscar's management as "brilliant strategists and operators." Iscar ended 2012 with more than 11,900 employees. The Wertheimers' sale of an 80% Iscar stake in 2006, announced one day before Berkshire's annual meeting that year, made the family among the richest in Israel.
Prime Minister Benjamin Netanyahu on Wednesday called Iscar board chairman Eitan Wertheimer and congratulated him on the deal. "Good job," Netanyahu said, "This is a great honor for you and for Israeli industry. And also thank you on behalf of the government coffers."
