Warren Buffett is now joining the band wagon. Check out the article below.
Billionaire Buffett’s Berkshire Hathaway to finally invest in gold…jewelry
Billionaire Warren Buffett’s Berkshire Hathaway intends to create the largest U.S. gold jewelry manufacturer, the new Richline Group.
Author: Dorothy Kosich
Posted: Monday , 21 May 2007
RENO, NV –
The company of U.S. billionaire Warren Buffett–who nearly a decade ago ridiculed the non-productive aspects of gold–intends to acquire U.S. gold jewelry manufacturers, Bel-Oro International and Aurafin LLC.
Berkshire Hathaway announced Friday it has entered into definitive agreements to acquire the companies and will combine them into the newly formed Richline Group, which aims to be the largest jewelry supply group in the United States.
During a 1998 speech at Harvard, Buffett noted that gold “gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”
In a news release, Dave Meleski, Auragin CEO, called it “an unprecedented transaction in our industry. We are proud to have a top financial investor invest in which will now the largest jewelry supply group in the USA.” Meleski and Bel-Ore CEO Dennis Ulrich have agreed to merge the companies into two large and cohesive operating entities under Richline Group. Both brand names will be kept although Richline intends to achieve operational and administrative cost synergies.
Ulrich will become the CEO of Richline Group and will manage the company. Meleski will become president of the new group. The two jewelry companies generate more than $500 million in revenue and employ 1,800 people internationally.
The transaction is expected to close during the second or third quarter of 2007.
Mark Hanna, spokesman for Bel-Oro, told the Associated Press that the combined company will account for about 6% of the world gold jewelry market. Berkshire owns several jewelry retailers including Helzberg’s and Borsheim’s, which buy gold jewelry from Bel-Oro or Aurafin, according to Hanna.
