Berkshire Hathaway’s Strategic Deepening of Its Stake in Japan’s Mitsubishi Corp.

Warren Buffett’s Berkshire Hathaway has long been a master of identifying undervalued, capital-efficient businesses with durable competitive advantages. Its recent decision to raise its stake in Japan’s Mitsubishi Corp. to 10.23%—a move executed through its subsidiary National Indemnity Company—fits squarely within this framework. This increase, which follows a prior 9.7% stake in March 2025, underscores a broader strategic bet on Japanese trading houses as engines of long-term value creation in an era of economic fragmentation and geopolitical uncertainty [1].

A Governance-Driven Investment

Berkshire’s stake, while non-controlling, grants it significant influence over Mitsubishi’s governance structure. Japanese trading houses have historically been criticized for opaque decision-making and cross-shareholding systems that prioritize internal stakeholders over external investors. However, Mitsubishi’s recent governance reforms—such as the establishment of an Audit & Supervisory Committee and enhanced board oversight—position it to align more closely with global best practices [2]. By leveraging its voting power, Berkshire may push for further transparency, executive accountability, and capital recycling initiatives, such as dividend increases and share repurchases, which have already been prioritized by Mitsubishi [5]. This aligns with Buffett’s preference for companies that return capital to shareholders and operate with disciplined efficiency.

Strategic Resilience in Volatile Markets

Japanese trading houses, or sogo shosha, are uniquely positioned to thrive in volatile markets. Their diversified portfolios span energy, logistics, consumer goods, and emerging sectors like hydrogen and ammonia-based energy infrastructure [4]. This diversification allows them to hedge against sector-specific downturns while capitalizing on global trends such as decarbonization and supply chain reconfiguration. For instance, Mitsubishi’s investments in renewable energy and sustainable aviation fuel demonstrate its adaptability to shifting regulatory and environmental demands [1].

Moreover, these firms benefit from Japan’s low-interest-rate environment and a yen-denominated debt structure that reduces borrowing costs. Their shareholder-friendly policies—such as Mitsubishi’s commitment to a 10% annual dividend and $1 billion in share repurchases—further enhance their appeal in a market where capital preservation and returns are paramount [3]. Analysts note that Japanese trading houses have outperformed global peers in maintaining stable earnings, even amid U.S. tariff pressures and supply chain disruptions [5].

A Broader Bet on Japan’s Economic Evolution

Berkshire’s stake in Mitsubishi is part of a larger strategy to deepen its exposure to Japan’s corporate sector. Alongside its increased holdings in Mitsui & Co., the move reflects confidence in the country’s ongoing governance reforms and its role as a hub for innovation in semiconductors, critical minerals, and green technology [2]. Recent U.S.-Japan trade agreements, including reduced automobile tariffs, have also bolstered the competitive positioning of these firms in global markets [3].

Critically, Buffett’s approach mirrors his historical preference for “economic moats”—businesses with enduring advantages that protect them from competition. Japanese trading houses, with their global networks, operational efficiency, and ability to aggregate market intelligence, exemplify this model. As global markets become increasingly fragmented, these firms are well-positioned to act as intermediaries in the transition to a more decentralized and sustainable economy [4].

Conclusion

Berkshire’s deepening stake in Mitsubishi Corp. is more than a financial maneuver; it is a signal of confidence in Japan’s corporate governance evolution and the strategic resilience of its trading houses. By combining long-term value creation with governance-driven reforms, these firms are poised to deliver outsized returns in a volatile global landscape. For investors, the move highlights the enduring appeal of companies that balance stability, innovation, and shareholder-centric policies—a formula that has defined Buffett’s success for decades.

Source:
[1] Berkshire Hathaway Raises Stake in Mitsubishi Corp. to Above 10% [https://www.morningstar.com/news/dow-jones/202508281452/berkshire-hathaway-raises-stake-in-mitsubishi-corp-to-above-10]
[2] The Quiet Takeover: How Berkshire's Stake in Mitsubishi ... [https://www.ainvest.com/news/quiet-takeover-berkshire-stake-mitsubishi-signals-era-japanese-corporate-governance-2508/]
[3] Why Buffett's Japanese Trading House Picks Have Room ... [https://www.morningstar.com/stocks/why-buffetts-japanese-trading-house-picks-have-room-rise-20-or-more]
[4] JAPAN'S TRADING HOUSES: FROM EMPIRE BUILDERS ... [https://www.linkedin.com/pulse/japans-trading-houses-from-empire-builders-energy-craig-peacock-wqmlf]
[5] Japanese trading houses lure investors with healthy ... [https://www.reuters.com/business/japanese-trading-houses-lure-investors-with-healthy-returns-amid-us-tariff-2025-05-02/]