Warren Buffett buys out Israeli tool firm Iscar for $2 billion

American corporate billionaire Warren Buffett's company Berkshire Hathaway is to buy 20% of the shares of Iscar, the Israeli cutting tool firm, from the Wertheimer family for about $2 billion. This will give Berkshire Hathaway complete ownership of the company because it acquired 80% of the company's shares seven years ago.

The deal is based on a valuation of about $10 billion for Iscar, which has its headquarters in the northern Israeli community of Tefen and is now formally known as International Metalworking, or IMC. That's double its valuation when the Berkshire Hathaway bought its initial 80% stake in 2006 for $4 billion.

“Since the time IMC entered our lives, my partner Charlie Munger and I have enjoyed Berkshire’s association with the company, the Wertheimer family and the company’s management team," said Buffett, Berkshire Hathaway's Chairman and Chief Executive Officer. “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, and we are delighted to acquire the portion of the company that was retained by the Wertheimer family when IMC first became a member of the Berkshire group of companies. We look forward to continuing our stewardship of this unique company founded by the Wertheimer family in Israel 60 years ago and nurtured into a truly global enterprise."

"We are very pleased that IMC has found a permanent home in Berkshire Hathaway, which fully appreciates the unique nature of the global Israeli enterprise that we have created and that is committed to remaining true to that heritage in every way, building on and continuing our historic success and special culture," said Eitan Wertheimer, whose father Stef founded Iscar.

"The growth experienced by IMC since the 2006 Berkshire transaction validates the faith that Warren [Buffett] and Charlie [Munger] showed in our business and the special people in Tefen, Israel and around the world who have made our success possible," said Wertheimer. "We are confident that the vision begun by Miriam and Stef Wertheimer, and carried forward by the family’s second generation, in partnership with IMC’s supremely talented and dedicated executive team, will continue to drive the group forward as a part of the Berkshire family, under the leadership of President and CEO Jacob Harpaz.”