Warren Buffett knows a smart deal in China when he sees one. He came away from a $488 million investment in PetroChina in 2002/03 with a $3.5 billion profit in 2007 (see Buffett On PetroChina). Now he is putting down $231 million for a 10% stake in BYD Co., China’s largest maker of rechargeable batteries (Announcement).
The investment will be held through Buffett’s MidAmerican Energy Holdings Co. BYD is based in Shenzhen and has 130,000 employees around the world. Its stock is listed just down the road on the Hong Kong Stock Exchange. It had sales of $1.8 billion in the six months to June, two thirds of which were in China. The company’s chairman, Wang Chuanfu says the deal will help give BYD greater access to global markets, particularly for its electric vehicles.
Green all round, I’l bet.