Warren Buffett says he was close to making a 'very large' acquisition in the fourth quarter

  • Warren Buffett says he was close to making a big acquisition in the fourth quarter, but it fell apart.
  • Buffett says he doesn't think the deal is on the table any longer but does not say why not.
  • When pressed for further details on the mystery deal, Buffett says, "I'll give you a hint. It's on this planet."

Billionaire investor Warren Buffett said Monday he was close to making a big acquisition in the fourth quarter, but it fell apart.

"We had at least one deal possible that would have been very large," Buffett told CNBC's Becky Quick from Berkshire-owned Nebraska Furniture Mart on Monday. "I liked stocks in the fourth quarter, but I would like buying a business even better."

Buffett added that he didn't think the deal was on the table any longer but did not say why not. When pressed for further details on the mystery deal, Buffett said, "I'll give you a hint. It's on this planet."

The 88-year-old chairman and CEO of Berkshire Hathaway spoke from Omaha, Nebraska, after the release of the conglomerate's annual shareholder letter this weekend. In the widely shared letter, Buffett said he wanted to make an acquisition, but prices "are sky-high for businesses possessing decent long-term prospects."

Warren Buffett, Chairman and CEO of Berkshire Hathaway.
David A. Grogan | CNBC
Warren Buffett, Chairman and CEO of Berkshire Hathaway.

"That disappointing reality means that 2019 will likely see us again expanding our holdings of marketable equities. We continue, nevertheless, to hope for an elephant-sized acquisition. Even at our ages of 88 and 95 – I'm the young one – that prospect is what causes my heart and Charlie's to beat faster," he said. He was referring to his partner, Charlie Munger.

Berkshire had $112 billion in cash at the end of 2018, Buffett said Saturday, and investors were eager to find out what the plans were for the massive cash pile.

Buffett hinted on Monday that he was seeing some competition for acquisitions from private equity, who have a tremendous amount of buying power these days when they use leverage, he noted. "It's just a huge amount of competition," Buffett said on Monday.

Berkshire posted a rare share loss during the fourth quarter, taking a massive $3 billion write-down on its investment in Kraft Heinz. The company disclosed the write-down last week after Kraft Heinz slashed the value of its Oscar Mayer and Kraft brands by $15.4 billion.

Buffett told CNBC on Monday that Berkshire paid too much for Kraft, noting he might have misjudged certain aspects about the company.