The Sâgë of Omaha

Berkshire Hathaway and Ikea could be a match made in heaven. Bloomberg's Josh Hamilton has a speculative story wondering which companies Warren Buffett might be interested in buying, now that values have come down a bit – and what should appear near the bottom of the list but Ingvar Kamprad's world-famous furniture-and-meatballs retailer.

On the face of it, Ikea is perfect for Berkshire: profitable, popular, extremely well-run, and with a global footprint. But it does occur to me that Buffett is actually better as a minority investor in public companies than he is as the owner of a controlling majority stake in businesses. Many of his best-performing long-term bets, like Coca-Cola and Wal-Mart, were not companies he bought outright – just companies he bought shares in.

General Re, and Buffett's insurance companies more generally, were excellent acquisitions, of course, since they came with billions of dollars in cash which he could then invest. But when he buys whole companies, what does he end up with? Generally a bunch of second-rate brands like Benjamin Moore and Nebraska Furniture Mart. Even Netjets, which is a great business idea with a huge amount of buzz and an excellent reputation, has been a disappointment in practice.

An Ikea acquisition could change all that, and give Berkshire Hathaway ownership of one of the strongest brands in the world. And it would prove that Rupert Murdoch isn't the only billionaire capable of buying a world-famous franchise from a family which has no real interest in selling it.

Problem is, there isn't an Ikea in Nebraska. Yet.