By Dr. David Kass
The Financial Times reported today that Berkshire Hathaway is acquiring Devlet Louis Motorradvertriebs, a German (Hamburg) based retailer of motorcycle apparel and accessories for about $450 million. Warren Buffett, looking for investment opportunities in Europe, stated “we have cracked the code in Germany”.
Louis is a family business that will remain a standalone subsidiary of Berkshire, overseen by one of Mr. Buffett’s portfolio managers, Ted Weschler. Louis has 71 stores in Germany and Austria, and also sells through catalog and e-commerce. It has gross revenues of $300 million and 1,600 employees.
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This is Berkshire’s second exposure to the motorcycle business. In February, 2009 it lent $300 million to Harley Davidson at a 15% interest rate at the peak of the financial crisis. Harley Davidson repaid this loan in February, 2014.