SAN FRANCISCO (MarketWatch) - Berkshire Hathaway Inc., the insurance-focused conglomerate run by Warren Buffett, expanded deeper into the jewelry business on Thursday after its Richline Group subsidiary acquired two gold jewelry manufacturers.
Private-equity firm Norwest Equity Partners said it sold Aurafin LLC to Richline Group for an undisclosed amount. Richline also acquired Bel-Oro International to become what it said would be the largest supplier of gold jewelry to retailers.
Berkshire
is already a major player in the jewelry business, owning retailers Borsheim's, Helzberg Diamonds and Ben Bridge. The purchase of Aurafin and Bel-Oro, which supply jewelry to thousands of retailers, adds another link in the chain for Berkshire.
What's unusual is that Berkshire bought Aurafin from a private-equity firm. Buffett and Berkshire Vice Chairman Charlie Munger have criticized the buyout business in recent years. The industry has raised record amounts of money and has been spending it on big acquisitions. That's made it more difficult for Berkshire to buy large companies.
During Berkshire's annual meeting last year, Buffett said that when he gets an offer to buy a business from a private-equity firm, he "puts the phone down faster than Charlie."
"They invariably auction the business and are looking for strategic buyers," Buffett said, adding that "a strategic buyer is just someone who pays too much."
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