Berkshire Meeting: Are 3G's Values Aligned With Berkshire's?

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Jonathan Brandt from the analyst panel asks what the minimum level of cash that Berkshire needs to have on hand to meet its regulatory obligations with insurers, or put another way, "what does the balance sheet look like if you are fully invested?"

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The answer prompts Mr. Munger to offer that he feels that Berkshire could do a $150 billion deal tomorrow if needed, presumably by taking on some debt and/or selling some stocks.

Mr. Buffett says he thinks the number is lower, but they agree that they have the firepower to do a very, very big deal."

"If we find a really big deal that makes compelling sense, we're going to do it," he says.

Click here to see the full live coverage of Warren Buffett at Berkshire Hathaway's annual meeting:

http://www.wsj.com/livecoverage/berkshire-hathaway-2017-annual-meeting-analysis

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Write to Erik Holm at erik.holm@wsj.com

Carol Loomis asks another pointed question from a shareholder about 3G Capital's tactics in laying off thousands of Kraft Heinz workers and whether its values are aligned with Berkshire's.

Mr. Buffett defends 3G's actions, while admitting that he doesn't like getting into the unsavory business of layoffs himself.

Economic growth is driven by industries getting more productive, from manufacturing to farming, he says, and the Kraft Heinz layoffs are part of that process. "They're doing what American business has done for a couple hundred years, and why we live so well," he says. "They don't want two people doing the job that one can do."

Mr. Buffett recalls that he had to lay people off at Berkshire's textile business years ago. "I frankly don't like going through that," he says. "It really needed change, but the change is painful for a lot of people. And I just would rather spend my days not doing that sort of thing."

Mr. Munger concurs: "I don't see any moral fault with 3G at all."

Click here to see the full live coverage of Warren Buffett at Berkshire Hathaway's annual meeting:

http://www.wsj.com/livecoverage/berkshire-hathaway-2017-annual-meeting-analysis

Write to Nicole Friedman at nicole.friedman@wsj.com

(END) Dow Jones Newswires

May 06, 2017 15:33 ET (19:33 GMT)