General Dynamics Corp

Summary

An American aerospace and defense corporation that Berkshire Hathaway acquired a major 14% holding in during the early 1990s.

Timeline & Role

1992: Buffett originally planned to conduct a brief arbitrage play surrounding a Dutch tender offer by the company, intending to realize a quick profit and exit. However, upon studying the company and the remarkable execution of its CEO, Bill Anders, Buffett completely reversed course. He bought aggressively, acquiring 14% of the shares outstanding after the tender completed, transforming an arbitrage trade into a long-term core holding. 1992 Letter

📚 Historical Mentions & Citations (1)

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1992 LetterExcerpt Available

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| Berkshire’s Major Investees | Berkshire’s Approximate Ownership at Yearend | Berkshire’s Share of Undistributed Operating Earnings (in millions) | | | | :--- | :---: | :---: | :---: | :---: | | | 1992 | 1991 | 1992 | 1991 | | Capital Cities/ABC Inc. | 18.2% | 18.1% | $ 70 | $ 61 | | The Coca-Cola Company | 7.1% | 7.0% | 82 | 69 | | Federal Home Loan Mortgage Corp. | 8.2% (1) | 3.4% (1) | 29 | 15 | | GEICO Corp. | 48.1% | 48.2% | 34 | 69(3) | | General Dynamics Corp. | 14.1% | -- | 11(2) | -- | | The Gillette Company | 10.9% | 11.0% | 38(3) | 23(2) | | Guinness PLC | 2.0% | 1.6% | 7(2) | -- | | The Washington Post Company | 14.6% | 14.6% | 11 | 10 | | Wells Fargo & Company | 11.5% | 9.6% | 16(2) | (17)(2) | | | Berkshire’s share of undistributed earnings of major investees | $298 | $230 | Hypothetical tax on these undistributed investee earnings | | | (42) | (30) | Reported operating earnings of Berkshire | 348 | | | 316 | | | | | Total look-through earnings of Berkshire | $604 | $516 | | | | Shares | Company | Cost | Market | | :--- | :--- | :---: | :---: | | 3,000,000 | Capital Cities/ABC, Inc. | $ 517,500 | $1,523,500 | | 93,400,000 | The Coca-Cola Co. | 1,023,920 | 3,911,125 | | 16,196,700 | Federal Home Loan Mortgage Corp. (“Freddie Mac”) | 414,257 | 783,515 | | 34,250,000 | GEICO Corp. | 45,713 | 2,226,250 | | 4,350,000 | General Dynamics Corp. | 312,438 | 450,769 | | 24,000,000 | The Gillette Company | 600,000 | 1,365,000 | | 38,335,000 | Guinness PLC | 333,019 | 299,581 | | 1,727,765 | The Washington Post Company | 9,731 | 396,954 | | 6,358,418 | Wells Fargo & Company | 380,983 | 485,624 |

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