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May 19 (Bloomberg) -- Billionaire Warren Buffett said there are ``far more'' potential takeover targets for his $200 billion Berkshire Hathaway Inc. in Europe than in emerging markets, as he looks outside the U.S. for acquisitions to spur profit growth.
The world's wealthiest person started a four-city European tour in Frankfurt today, seeking to form relationships that may lead to purchases by his Omaha, Nebraska-based investment and holding company.
``There's far more companies that would make sense for us to buy, and for them to sell to us, in Europe,'' Buffett said at a news conference, declining to identify possible targets. ``In emerging markets, there are going to be very, very few businesses that would be earning $75 million pretax. You want to fish in a pond where the fish are and Europe is a much better pond.''
Berkshire has $35 billion in cash and Buffett, 77, has been looking for places to put it. He's invested in China, Israel and the U.K., complaining that there's a dearth of U.S. investment opportunities for a company as large as Berkshire. Berkshire may get more than half its revenue outside the U.S. in 30 to 40 years, Buffett said.
He also said the U.S. economy is less than halfway through a credit crisis that sent home foreclosures to a record and sparked the collapse of Bear Stearns Cos., Wall Street's fifth- largest securities firm.
`Silliest Things'
``I don't necessarily think we're halfway through or necessarily a quarter of the way through the effects throughout the general economy,'' Buffett said. ``The initial effects are felt by the people who really did the silliest things, but you can have a whole bunch of domino-type effects that eventually can get to people who are doing fairly sound things.''
The worst U.S. housing slump in a quarter century sank the mortgage securities market causing banks and securities firms worldwide to amass at least $379 billion of writedowns and credit losses, regulatory filings show. Economic conditions wouldn't stop him from making a new U.S. acquisition if the right company presented itself, he said.
Buffett's trip includes meetings in Lausanne tomorrow and Madrid on May 21, finishing in Milan on May 22. The visit was arranged by Eitan Wertheimer, president of Israel's Iscar Metalworking Cos. -- acquired by Berkshire in 2006 in Buffett's first non-U.S. purchase -- and Angelo Moratti of the family-run Italian energy company Saras SpA.
Buffett owns about a third of Berkshire, which he built over four decades from a failing maker of men's suit linings into a company with businesses that range from candy-making to insurance and a $72.6 billion stock portfolio.
Not a Meddler
He's known for buying well-run, privately held companies with high barriers to would-be rivals, cutting deals on a handshake and not meddling in management. In exchange, he typically pays less than companies could receive in an auction.
Germany is fertile ground for Buffett's investment style because about three-quarters of companies there are family-run. Many were founded as the nation rebuilt after World War II and are now grappling with succession issues as their founders age.
``I want us to be on the radar screen of private companies,'' Buffett said today. ``I hope that when the time comes they recognize that in Berkshire Hathaway they can find things that they can't find anywhere else.''
Buffett, who described his visit to Europe as a ``deferred shopping tour,'' said he's looking for businesses he understands where the management is already in place.
``The bigger the better,'' he said. ``In order to have a meaningful impact on Berkshire we need to make large deals.''
Something `Unique'
Germany's privately-owned companies include Robert Bosch GmbH, the world's largest auto-parts maker, Aldi Group, Germany's biggest discount retailer, and Boehringer Ingelheim GmbH, the world's largest family-owned drugmaker.
``Many families go through certain stages of strategic decision-making and they need to know their options,'' said Iscar's Wertheimer, 56, whose company was founded in 1951 by his father. ``From Warren you get much more than money. You're part of something that's unique.''
Expectations for a weak U.S. currency add to the allure of earnings in other denominations. Since at least 2002, Buffett has made investments with the assumption the dollar will decline, first with direct bets against the currency, and then with the Iscar purchase.
The euro fetched less than a dollar when Buffett first enlisted Moratti in 2001 to advise him on potential European purchases. It traded at $1.5509 at 3:17 p.m. New York time today.
Weak Dollar
``The U.S. is going to continue to follow policies that make the dollar weaker,'' Buffett told reporters at the Berkshire annual meeting in Omaha earlier this month. Americans' preference for foreign goods causes the country to send about $2 billion in ``IOUs'' and assets abroad every day, pressuring the dollar, he said.
Buffett said today the strength of the euro wouldn't deter him from making purchases in Europe.
After paying $4 billion for 80 percent of Iscar, which makes cutting tools for manufacturers in plants around the world, Buffett said he hoped the deal would raise Berkshire's international profile and help him find new candidates in ``the bigger economies.''
An investor who says he buys companies ``for life,'' Buffett looks at businesses he understands and in which he can project performance during the next one or two decades. To familiarize himself with Europe's business culture and issues, Buffett has met Moratti, the Italian energy executive, in Omaha at least four times a year since 2001, Moratti said in an interview last month.
Devoted Following
Buffett has a devoted following, particularly in the U.S. About 31,000 shareholders and groupies from every continent except Antarctica filled Omaha's Qwest arena to overflowing earlier this month to hear Buffett answer questions for hours on topics ranging from the economy to his businesses and philosophy of life and marriage.
During the meeting, Buffett said a subsidiary was ``probably close'' to a ``mid-size'' U.K. acquisition.