On March 14, Financial Association News (Editor: Shi Zhengcheng) reported that as US stocks collectively fell into a correction range, the "American stock god" Buffett, widely regarded as a barometer for investment, was reported to be negotiating the sale of assets. This unusual development further deepened market suspicions about the future direction of the US economy.

The reason it is considered unusual is that Buffett, who operates a trillion-dollar business empire, rarely sells his non-publicly traded holding companies.

In last month's annual letter to shareholders, he wrote: "Berkshire almost never sells controlling enterprises unless faced with problems we believe are unsolvable."

(Source: Berkshire 2024 Fiscal Year Annual Report)

According to US media reports, Berkshire is negotiating the sale of its real estate brokerage business HomeServices, with the counterpart being a publicly listed company in the USA.$Compass (COMP.US)$. According to statistics, Compass is the largest real estate brokerage company in terms of transaction volume in the USA, while HomeServices ranks fourth.

According to Berkshire's annual report, HomeServices is under the utility company Berkshire Hathaway Energy (BHE) in the holding group, and the company had approximately 5,400 employees last year.

It should be noted that real estate agents in the USA are usually not counted as employees but work as 'independent contractors', allowing them to move freely between different companies. As of the end of last year, HomeServices operated under 48 brands with about 0.0377 million real estate agents spread across 820 property brokerage offices nationwide.

The report did not mention the transaction price, but the estimated value of HomeServices should be in the 'multi-billion dollar' range. However, after doubling its stock price in the past year, Compass's latest Market Cap is only 4.5 billion USD, making the economic pressure to complete the transaction considerable.

Berkshire acquired HomeServices in a deal back in 2000 and has held it ever since. Market speculation suggests that this rare sale may be related to the downturn in the USA Real Estate Industry.

In recent years, due to high inflation leading to high interest rates, coupled with high housing prices, the USA Real Estate market has continued to slow down, and property brokerage companies are also struggling. Industry Statistics indicate that the property sales volume in the USA will hit the lowest level since 1995 for the second consecutive year in 2024. Additionally, HomeServices has also been found to be liable in an industry antitrust case in 2023, reaching a settlement to pay 0.25 billion USD over four years.

Berkshire's annual report shows that HomeServices incurred a loss of 0.107 billion USD last year due to litigation-related costs. In 2023 and 2022, the Business made a net profit of 13 million USD and 100 million USD, respectively.

In response to the latest media reports, HomeServices issued a statement saying that no final agreement has been reached to sell the company to Compass.

According to limited Historical Data, Buffett last sold a private holding company in 2020, when he packaged and sold his newspaper business. Additionally, Berkshire also sold an injury Insurance company in 2019.

Editor/ping