Warren Buffett’s investment company Berkshire Hathaway has taken an 80 percent stake in Israel’s Iscar Metalworking Companies (IMC) for $4 billion, representing the largest deal ever involving an Israeli technology company.

Iscar is privately owned by the Wertheimer family and is a world leader in the production of metal cutting tools and machining technology. The Wertheimer family will retain a 20 percent stake in the company.

Based in Tefen in northern Israel, Iscar has production facilities and offices around the world.

“We will have the benefit of a strong platform that [is] committed to continuing our historical success,” said Eitan Wertheimer, Iscar chairman.

Strategic Investor

In a press briefing to Israeli reporters, Wertheimer said the company needed to bring in a strategic investor. He added that as a global company, it has often been difficult to buy foreign firms as an Israeli entity. Being part of the Buffett family should make things easier and open many doors that were closed to Iscar in the past, he said.

Iscar has never published official figures on its sales or revenues. But local experts estimate 2005 sales at more than $1 billion with net profit of more than $250 million. Wertheimer said that company sales have been growing at an annual rate of 15 percent. Iscar expects its financial figures will remain under wraps following the deal as they would be included in those of Berkshire Hathaway.

After becoming a part of Omaha-based Berkshire, IMC will continue to be managed by Chairman Eitan Wertheimer, son of the founder Stef Wertheimer, and president and CEO Jacob Harpaz.

“As a truly international business, IMC is a top performer in its industry, with exposure to European, Asian, and Latin American markets as well as significant opportunities for growth in the North American market,” said Warren Buffett, in a statement following the Friday night announcement.

News of the deal broke just hours before Berkshire Hathaway held its annual stockholders meeting in Omaha. In an interview with Israel Radio, Mr. Buffett said none of the 2,000 Israelis working for Iscar in Israel would lose their jobs. He noted this was the first time since 1965 that he could make such a promise. Iscar employs another 4,000 workers in various parts of the world.

Iscar began as a small welding shop in the 1950s. The deal includes all of Iscar’s subsidiaries but excludes Iscar Blades, the maker of cutting tools for the aerospace industry.

The deal must be approved by Israeli and American regulators. The acquisition represents the largest non-American company ever purchased by Buffett and the third-largest deal ever for Berkshire.