Warren Buffett can buy South Africa’s 10 largest companies – with R610 billion to spare

Warren Buffett’s Berkshire Hathaway can buy the ten most valuable South African companies with R610 billion to spare with his company’s large R3.22 trillion ($167.6 billion) cash pile. 

The ten most valuable companies headquartered in South Africa include internet giant Naspers, banking giants FirstRand and Standard Bank, and the two largest telecoms companies on the continent, Vodacom and MTN. 

Berkshire Hathaway’s cash pile rose to a record $167.6 billion (R3.22 trillion) at the end of the fourth quarter of 2023. 

The company released its results for the fourth quarter at the end of last week, revealing a massive cash pile and earnings of $8.48 billion. 

Most of Berkshire’s cash is held in short-term US Treasury bonds, and due to the rise in interest rates, the income from this cash pile has grown by over $1 billion from a year earlier. 

The enormous cash pile leaves Buffett well-equipped to pounce on any attractive opportunities to buy a business. 

Charlie Munger, Buffett’s longtime business partner, told the Wall Street Journal before his death that the odds of another big acquisition under the pair were “at least 50/50.”

However, during the presentation of Berkshire’s fourth-quarter results, Buffett said there is a lack of meaningful deals that would give the company a shot at “eye-popping performance.”

Late last year, Buffett said he was comfortable holding this much cash because he believed the stock market was overvalued and few good investment opportunities were available. 

“This cash pile ensures that Berkshire is built to last. I believe Berkshire can handle financial disasters of a magnitude beyond any heretofore experienced. This ability is one we will not relinquish,” he said.

This cash pile provides Buffett with the ammunition to make some eye-watering acquisitions that are hard to comprehend. 

For instance, Berkshire could buy every NFL team with cash to spare if desired. According to Forbes, The total combined value of all NFL teams is $163.5 billion, leaving Buffett with $4.1 billion left over if he bought them all. 

Closer to home, Buffett could buy the ten most valuable South African companies with over R600 billion to spare. 

The market cap of the top ten South African companies on the JSE is just over R2.6 trillion. These companies are listed in the table below. 

At current exchange rates, Berkshire’s cash pile is worth R3.22 trillion.