Warren Buffett CNBC Interview All Videos

because the call is at a premium, probably provides another point here. and then on top of that, we get 5% of the fully diluted common basically for nothing for buying the preferred. it’s a deal that is a very fair preferred, but it does create extra leverage for our partners, 3g, meaning they only have to put up half the equity and they get the play. if heinz works out as we expect, they will get a return higher on that common than on the preferred. but we do very well on the preferred and by having that preferred in there, we minimize the amount of deaf leverage. so this is not somthing, whether it’s debt to the ceiling on it. several people had written in about how this is different than your usual acquisition by partnering up with someone. normally, you look at a business where you want to keep the management that’s there and you look at that and it’s a long time add in. why do this with 3g? well, i’ve known georgegy powell for a dozen years. i’ve known him associates. i think they might be the best managers in the world. so — and incidentally, they’re getting no extra ride for managing it. so there is a 3% carveout for management if they meet certain performance targets. but i would love to have that group manage any business that we have and so they are the managing partners. we’re the financing partners. and to me, it’s a dream. i mean, we get terrific management with them. management i couldn’t buy. and they get somebody that can finance it with a phone call, which makes it very easy from their standpoint. is that 3%f annual net income or something? no. the ability to buy 3% of the common hits certainly performance levels. let’s get to question. this one is from jeff rodan. he writes in, are you worried berkshire will become too diversified and will end up having to sell off companies like other former diversified companies likeco cocola and ge because they strayed too far off their core businesses? so no. we have gray able at the energy business. that is his core business. before this deal, we had eight different companies, each of which would away fortune 500 company if owned separately and they have fortune 500 type managements. and those people are managing the businesses they want to manage. that’s the same situation we’re going to have at heinz. so we — we couldn’t run berkshire from the top. it’s not designed that way. it’s designed to have a group of businesses that are run by people that love them and then now hoe to run them. it’s their goal in life to run those businesses. their goal is not to run berkshire. their goal is to run the rare road or whatever it may be. it’s an ideal situation. i just stay out of the way. let’s get to another question. this comes in from bill breach. he writes in, regarding the abdomen sigz, can mr. buffett describe berkshire’s procedures to try and prevent premature leaks of insider information ring prospective acquisitions is in the? there have been a lot of questions about that. we try and minimize who knows about it. but you’re always going to try to have your lawyers know about it. our auditors don’t know about it. we don’t consult them. our cfo is going to know about it. my assistant is going to know about it. and that’s true with the other parties, as well. in this particular case, you