Berkshire Hathaway to Acquire Megadealer Van Tuyl Group

Billionaire investor Warren Buffett intends to become a megadealer next year.

His Berkshire Hathaway investment firm plans to acquire 78-store Van Tuyl Group, the nation’s largest privately owned auto dealership group. It ranks No.6 on the WardsAuto Megadealer 100, higher than some publicly owned dealer groups.

Van Tuyl sold 237,501 new and used cars and earned revenues of nearly $8 billion last year.

Under the impending deal, the company becomes Berkshire Hathaway Automotive. Larry Van Tuyl will continue to lead the renamed group that relocates from Phoenix to Dallas.

“The Van Tuyl Group fits perfectly into Berkshire Hathaway from both a financial and cultural viewpoint,” Buffett says, adding, “This is just the beginning for Berkshire Hathaway Automotive.”

“I cannot think of a better steward to continue the legacy of what my father and I have built over the last 62 years,” Van Tuyl says, referring to his father Cecil, the group’s founder.

Larry Van Tuyl will serve as chairman of Berkshire Hathaway Automotive. The CEO post will go to Van Tuyl executive Jeff Rachor, former president of another dealership chain, Sonic Automotive.

The transaction is slated for completion early next year. It is subject to approval from major automakers the Van Tuyl Group represents. Buffett doesn’t see a problem there.

“The Van Tuyl Group enjoys excellent relations with the major auto manufacturers and delivers unusually high volumes,” he says.

The impending deal also is subject to customary closing conditions and various regulatory approvals.

Publicly traded Berkshire Hathaway says the dealership group “will continue to pursue its strategy of operational excellence and disciplined acquisition growth, which is no change to the business model the company has pursued for the last 62 years.”

Van Tuyl added only four stores in 2013, but gained nearly $1.1 billion in revenue. The average annual revenue per store is $104.8 million.

The proposed acquisition wins praise from Sandy Schwartz, president of Cox Automotive, an industry service provider through companies such as AutoTrader.com and Manheim auctions.

“This acquisition shows the value and importance of dealerships such as the Van Tuyl Group in the automotive ecosystems,” he says, adding that “it’s exciting to have a leader like Warren Buffett be a part of the automotive community.”  

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