Buffett buys out Rexam subsidiary for £275m

Warren Buffett, the world's wealthiest investor, has bought the building-components subsidiary of Rexam, the British consumer packaging company, for £275m.

Mr Buffett's investment company, Berkshire Hathaway, yesterday added MiTek, which has its headquarters in the United States, to its diverse portfolio, helping Rexam to complete its refocus from a wider industrial base to its core beverage and plastic packaging businesses. The sale includes the UK-based manufacturing interests of MiTek.

If there were any tips for other UK companies to glean about how to attract an investor of the calibre of Mr Buffett, Rexam was keeping them under wraps, saying only: "Berkshire quickly found out that it wanted what we were selling."

Berkshire's takeover of the Missouri-based MiTek, which makes steel connectors as well as designing engineering software and providing services for the building-components market, extends the Omaha-based investment company's recent buying spree of Old Economy bricks-to-paint industries.

Last year, Berkshire paid $8bn (£5.8bn), almost all in cash, for various manufacturers of bricks, paint and insulation, among others, with total sales of about $13bn. So far, Berkshire's expansion into the building industry has focused on US companies, although Mr Buffett has expressed an interest in expanding into Europe.

Previously, Mr Buffett has said the main factor holding him back from investing in Britain is the regulation that forces investors to disclose stakes of 3 per cent or more.

Rexam said the sale of MiTek brought the total proceeds from its programme to dispose of its non-packaging businesses, which account for 11 per cent of sales, to £615m. Last year, the company set itself a target of achieving £800m in disposal proceeds by the end of 2001 as it cements the break with its conglomerate past. It is using the money to chip away at its debt mountain, currently £1.6bn. Rexam's shares closed down 1p at 309.75p.