Oct 2, 2014 9:16 AM
Buffett's Berkshire Hathaway buys auto dealer
The Associated Press
OMAHA, Neb. (AP) Warren Buffett is getting into the automobile sales business.
The billionaire's Berkshire Hathaway, owner of businesses ranging from the BNSF railroad to Dairy Queen, Geico insurance and power providers, is buying the privately-owned auto dealership company Van Tuyl Group. Financial terms were not disclosed.
Van Tuyl Group says it is the biggest privately owned auto dealership group in the U.S. It has 78 independently operated dealerships and more than 100 franchises in 10 states. The company will be renamed Berkshire Hathaway Automotive and be based in Dallas.
Buffett, in an interview on CNBC on Thursday, said that there are huge opportunities for market consolidation in the fragmented auto dealership business.
Van Tuyl Group's current CEO, Larry Van Tuyl, will become chairman of the auto unit. Cecil Van Tuyl, Larry's father, started with a Kansas City Chevrolet dealership in 1955. He was joined in the family business by Larry in 1971, according to the company's website.
Jeff Rachor will become CEO once Larry Van Tuyl transitions to the chairman position.
Buffett said that Van Tuyl's job will be to scout out dealerships for potential acquisitions and determine which ones to pursue. Buffett will provide the funding for any possible transactions.
"We've got the capital so we're off to the races," he said.
The deal is expected to close in 2015's first quarter. It still needs approval from major auto manufacturers.
Berkshire Hathaway Inc. is based in Omaha, Nebraska.