Finance History | Forest River, 31 August 2005 — A Two-Page Fax Led to a 60-Plant RV Acquisition

On 31 August 2005, Berkshire Hathaway completed its acquisition of Forest River, a major United States manufacturer of recreational vehicles and other leisure products. The deal began on 21 June when owner and manager Pete Liegl sent Warren Buffett a two-page fax explaining how Forest River met Berkshire's published acquisition criteria. Buffett had not previously known the company or Liegl, but requested additional figures, received them the following morning and made an offer that afternoon. The two principals reached a handshake agreement on 28 June, and the acquisition closed about two months later. Forest River entered the process with approximately US$1.6 billion of annual sales in 2005 dollars, 60 plants and 5,400 employees. The company manufactured motorized and towable recreational vehicles as well as utility trailers, buses, boats and manufactured houses. Berkshire did not disclose a separate Forest River purchase price in the annual report, instead reporting US$2.4 billion of aggregate consideration for all business acquisitions completed during 2005. That distinction matters because assigning the full annual acquisition total to Forest River would overstate the documented price and ignore Medical Protective and smaller purchases. The operating risks were substantial because recreational vehicles are discretionary big-ticket products whose demand can respond sharply to interest rates, fuel prices, dealer inventories and consumer confidence. A 60-plant footprint also required disciplined capacity, labor, procurement and working-capital management when orders rose or fell. Berkshire emphasized that Forest River had consistently gained market share and was expanding into categories such as boats, suggesting that management execution mattered as much as the broader cycle. The transaction became a compact example of Berkshire's acquisition method: a seller approached directly, financial information moved quickly, and operating autonomy remained part of the bargain. Forest River's results were consolidated into Berkshire beginning 1 September 2005, the day after the closing date. The photographed Sunseeker on Rue Durivage is a public product anchor rather than the place where the acquisition was negotiated, signed or completed. Its branded body represents the inventory, dealer relationships and consumer demand behind the 60-plant business that joined Berkshire after an unusually short courtship. Photo: Bull-Doser, public domain, via Wikimedia Commons.