🎨 Benjamin Moore

•     In July, Bob Mundheim, a director of Benjamin Moore Paint, called to ask if Berkshire might be interested in acquiring it. I knew Bob from Salomon, where he was general counsel during some difficult times, and held him in very high regard. So my answer was “Tell me more.” In late August, Charlie and I met with Richard Roob and Yvan Dupuy, past and present CEOs of Benjamin Moore. We liked them; we liked the business; and we made a $1 billion cash offer on the spot. In October, their board approved the transaction, and we completed it in December. Benjamin Moore has been making paint for 117 years and has thousands of independent dealers that are a vital asset to its business. Make sure you specify our product for your next paint job.

•      The large acquisitions we initiated in late 2000 — Shaw, Johns Manville and Benjamin Moore — all came through their first year with us in great fashion. Charlie and I knew at the time of our purchases that we were in good hands with Bob Shaw, Jerry Henry and Yvan Dupuy, respectively — and we admire their work even more now. Together these businesses earned about $659 million pre-tax.

JONATHAN BRANDT: I have a question about the competitive landscape in the paint business. I personally always use Benjamin Moore, but some say that Benjamin Moore is disadvantaged because it doesn’t control its own distribution, as does Sherwin-Williams, and they note that it has lost market share to Behr, which is sold in the home centers at lower prices. You recently replaced management there. What changes in strategy and/or pricing, if any, are being undertaken at that unit, and what is the outlook for that franchise? WARREN BUFFETT: Yeah. Benjamin Moore, it’s a relatively small percentage of the total paint industry, but it — at the high end, it is the best regarded paint, and we have not lost position in that respect. But the — when we purchased Benjamin Moore, I made a promise. I even made a video. It had a dealer system, and people that invested their savings and passed on from generation to generation dealerships from Benjamin Moore, and counted on the company adhering to a dealer system, even though you could always get a huge jump in volume, particularly in the first year, if you went with the big boxes. So we were always approached by the big boxes, and they said, you know, “Let us take Benjamin Moore into our stores,” whether it be Home Depot or whomever. And we would’ve gotten a big jump in volume when that happened and they would’ve loved us — to have us — as a brand with that kind of identity in their stores, but it would’ve represented a total change in the distribution arrangement.