Warren Buffett Recently "Came Pretty Close" to Spending $10 Billion On an Acquisition, and I Strongly Believe One of These 2 Companies Was the Target

Core Insights - Berkshire Hathaway's CEO Warren Buffett is considering potential acquisition targets, specifically mentioning a willingness to spend up to $100 billion if the right opportunity arises [5] - Two companies identified as potential acquisition targets are Sirius XM Holdings and Stanley Black & Decker, both of which align with Buffett's investment criteria [21] Group 1: Sirius XM Holdings - Sirius XM Holdings has a market capitalization of nearly $7.4 billion, making it a logical acquisition target for Berkshire Hathaway [6][7] - Berkshire Hathaway is the largest shareholder of Sirius XM, holding 35.4% of its outstanding shares, which would reduce the out-of-pocket cost for acquiring the remaining shares [7] - Sirius XM operates as a legal monopoly with a satellite-radio license, providing it with subscription pricing power that competitors lack [8] - The company generates over 75% of its revenue from subscriptions, offering more predictable cash flow compared to traditional radio providers reliant on advertising [9] - Sirius XM's shares are currently valued at just over 7 times forecast earnings per share for 2025, presenting an attractive risk-versus-reward profile [11] Group 2: Stanley Black & Decker - Stanley Black & Decker has a market capitalization of approximately $10 billion, making it another potential acquisition target for Buffett [14][15] - The company's stock fell to around $8.5 billion during a market downturn, making it accessible for a $10 billion buyout [15] - Stanley Black & Decker has a strong brand portfolio, including DeWalt and Craftsman, which are well-recognized and trusted by consumers [17] - The company has a long history of dividend payments, having increased its base annual dividend for 58 consecutive years, indicating a stable operating model [18] - Management has implemented a global cost reduction program that has resulted in approximately $1.7 billion in pre-tax annual run-rate cost savings since mid-2022 [19] - Stanley Black & Decker shares are priced at roughly 11 times forecast earnings per share for 2026, representing a 37% discount to its average forward-year earnings multiple over the past five years [20]