Buffett's Berkshire Buys Into China Battery Maker BYD

By Bei Hu

Sept. 27 (Bloomberg) -- Billionaire Warren Buffett's Berkshire Hathaway Inc. agreed to pay HK$1.8 billion ($231 million) for a minority stake in BYD Co., China's largest maker of rechargeable batteries.

Berkshire Hathaway unit MidAmerican Energy Holdings Co. will buy 225 million BYD shares, equivalent to a stake of about 10 percent, in the Shenzhen-based manufacturer, according to a statement issued through Business Wire today.

Omaha, Nebraska-based Berkshire Hathaway is tapping into rising global demand for environmentally friendly technology. The partnership with MidAmerican would help BYD bring its electric vehicles and other environmental protection measures to the global market, Wang Chuanfu, the Chinese company's chairman, said in the statement.

``As worldwide discussions relating to global climate change and environmental respect continue, the technologies being developed by BYD will be an integral part of the future,'' MidAmerican Chairman David Sokol said in the statement.

BYD aims to start selling gasoline-electric hybrid cars in the U.S. as early as 2010, joining larger rivals such as General Motor Corp. and Toyota Motor Corp., it said in January. It also plans to roll out its first all-electric auto in China next year.

Global Crisis

The BYD investment comes as companies including the largest U.S. financial institution, court high-profile investors such as Berkshire Hathaway after the global credit crisis wiped out $8 trillion of value from world stock markets since Oct. 31, according to data compiled by Bloomberg.

Berkshire Hathaway this week bought $5 billion of perpetual preferred stock in Goldman Sachs Group Inc.

BYD last month announced first-half profit fell 7 percent as costs for raw materials such as oil surged, wiping out a 44 percent increase in sales. BYD's share price has more than halved since peaking on Oct. 31. The stock edged up 0.7 percent to HK$8.40 on Sept. 26.

BYD shares fell to a five-month low on June 30 after Hong Kong's High Court dismissed its request to halt a lawsuit filed by Foxconn International Holdings, the world's biggest contract maker of mobile phones, for allegedly stealing trade secrets.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net