In theory, companies like Berkshire Hathaway (BRK.A) and GE (GE) have an advantage over other financials in that they could always dump an opearting unit if pressed for cash. GE could sell off its water desalinization business, or maybe GE Medical. Berkshire could sell Clayton Homes or See’s Candies or Justin Boots or Dairy Queen.
But while Berkshire has this option, we can assume it would be a desperate last resort and not something done just to raise capital, or because there was an offer on the table. As Buffett has said several times, one of his big competitive advantages is that sellers want to sell to him.
It sounds odd, because you’d think that a seller would just care about price, and nothing else. But if you’ve cultivated a family business, selling boots or chocolate or notepads or what not, and you don’t want to see your company gutted, or levered up to the wazoo, then you may be willing to accept a lower price from Buffett than you would another potential acquirer.
If Buffett were to start selling units, it’d be like a museum that started selling its artwork to raise money for the coffers. Sure, it could do it theoretically, but who would ever donate their collections to that museum ever again, knowing it could be flipped.
So sure, if it’s a unit sale or bankruptcy, then they’d sell a unit, but it’s to be avoided if at all possible.
Disclosure: The author owns a Berkshire b share.