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OMAHA, Nebraska - In an assured voice, speaking naturally and without prompts, Eitan Wertheimer stood tall on Saturday before the audience of 30,000 people at a stadium where Berkshire Hathaway was convening its shareholders assembly, and announced: "I am glad to join the Berkshire Hathaway family."

A few moments before, he had been heaped with praise by the world's most important investor. Warren Buffett announced that his $4 billion investment in Iscar and its management would prove to be one of the most significant things his investment company had ever done.

"As the fields turn greener and the days get longer, I come here, to Omaha, Nebraska, and tell you - the Berkshire Hathaway family - that we, our families, all the Iscar employees and their families, are proud to join you," the young Wertheimer began his speech. "It took us three years to decide how to advance Iscar to the next stage, and when we met the Berkshire Hathaway people and were impressed by its strong culture, which is like our culture, we decided we wanted to go ahead."

And thus the Wertheimers sold the family blades business, which had been founded 56 years before, at a company valuation of $5 billion. As always, Wertheimer the heir was happy to talk about production, manufacturing and management, but he didn't want to talk figures.

Eitan, you took us by surprise. Why did you decide to sell your controlling interest in Iscar?

"We reached the point of a crucial strategic decision. After making the firm into a multinational one, we wanted to reach the next stage of the game, to be on truly global turf. That means tomorrow, I want to be a big player reaching bigger customers. So I had to be connected with somebody big. Tomorrow I want to carry out big acquisitions: I had to do it with new backing. In four or five years we'd have reached the barrier, and I wanted to solve the problems before they materialize."

This morning Warren Buffett told me that Iscar doesn't need his help.

"Buffett's name and backing are of tremendous value in the business world. To be part of this family has great value. I don't need money, but if I come as part of the Berkshire group, I look completely different. When I come to a major American carmaker, they don't ask me who I am and what I do: I look different with Buffett behind me."

How did the idea come up?

"For years we searched for the next stage. I have a habit: I want to solve problems well in advance. That is how we started, years ago, the most important process, of shifting the management from the family to professional managers. That is how we changed from being a niche player into a player of entire product lines, and that is how we risked investments in the Far East, in Japan and Korea, at times when nobody was even looking at them."

The company's objective was to still be around in the upcoming decades, and the business models the management examined did not make the grade for Iscar, Wertheimer describes. They looked at a Wall Street offering (Iscar is privately held), or a merger, possibly with a rival; they looked at private equity funds and, in fact, everything they could - in a quiet fashion. "After all these checks, we concluded that the biggest and most significant thing for us was the corporate culture, people who balance between responsibility and authority," Wertheimer says.

Another corporate culture element at Iscar is giving young people a chance, he adds, and a growing company creates opportunities.

How many youngsters are there in management?

"We have no management," Wertheimer states. "We have kitchens. We haven't had a formal board of directors meeting for 15 years. We are constantly holding meetings and making decisions, all informally."

He feels the Iscar community has something in common with Warren Buffett: an appreciation of ability, entrepreneurial spirit, and the people who do the work. "They are experts in not getting in the way," Wertheimer explains, and so he decided to sit down and write the Oracle a letter. A few hours after sending it, he says, Warren Buffett got back to him.

What did you tell him?

"What I told you, that we're a company looking for the next step, roughly what our figures were, and that we'd be happy to tell him more. He told me, come. So I told him, look, I'm not alone in this: We're a group of people living together, breathing together and wanting to move on together. So the whole group came - CEO Jacob Harpaz, who is one of the best managers I ever met in my life, Danny Goldman, a CFO who does 70 other things besides. We quietly slipped off to Omaha.

"We went to drink coffee in his office. He told me, at the start of the meeting in his tiny room, that this was the biggest meeting he'd ever held there," Wertheimer describes. The next morning he took us with him, he drove to get a hamburger, and after the meal, he sent us to talk with Charlie. We flew to New York. At nine at night we met with him, until one in the morning. He put us through 'hot, cold.' Later we understood that's part of the process by which they work.

"We went home. A month after that I returned, the first day of spring. He asked us to meet again with Charlie, who was in Los Angeles. I went with Danny. The trip got longer and longer - every day we bought new shirts - eight days. We went back to Omaha on Friday at six in the evening. He opened the door himself. We sat and talked until nine and in the morning, we arranged to meet.

"At ten in the morning, he said, 'I'm going to get a haircut. Come back after that, in casual dress.' Danny went off to read some material in the small office, and we sat silently for 20 minutes. When we were finished, we called Danny and closed. The deal was subject to a check that took three weeks. Last Tuesday we saw the contract, on Thursday we met, and Friday we signed. This is the smoothest, most pleasant deal we ever did."

When did you decide to sell control over Iscar, not just to bring in an investor?

"From the moment we started talking with Buffett. There are clear rules, which we studied. If you come to Buffett, you come first, don't drum up a market, don't talk with anybody else. Come with a price, and don't waste time. If you don't know what you want, it's a waste of time. His pattern of investment is either 100 percent or in some cases 80 percent. I told him I wanted more than 20 percent, but understood that they want to consolidate Iscar in their balance sheet."

So in the space of a few weeks you decided to sell the company that your father founded 54 years ago.

"When we decided to talk with Buffett, we knew we would have to relinquish control. In the first month I tossed and turned in bed. We all thought about it, Stef and all the guys inside. From the start we decided, either everybody wants it, or not. There could be no fifty-fifty, everybody was to be together. The consensus came from the heart, no pressure. Either everybody was satisfied, or we wouldn't do it.

"We have to live with it for many years. We had to feel wholehearted about it. History will judge us."

What did Stef say?

"Stef said that what's good in the long run for Iscar and its people is what's right."

Why didn't Stef come today?

"Stef wanted it to be clear that it's our turf. He's occupied with a lot of other things."

Didn't it cut him a bit?

"I spoke with him this morning. He was happy. He said, 'I take my hat off. You should be pleased, I'm pleased for you'."

You received $4 billion, of which a billion will go to tax. What will you do with it?

"It'll all go to industry or to philanthropy in education, education for industry, industrial parks."

Won't you be making any new investments?

"We don't understand finances. Even when we are do-gooders, everything is confidential, done as quietly as possible. The media still doesn't know what we do, because in philanthropy, not talking is key. You won't see our names on any plaques on monuments."

What have you learned from Buffett?

"Simplicity is wisdom. I learned from him that I can learn to think more clearly, more basically. His analyses are very clean. He reaches the truth of the matter much more quickly. I learned to rely on the right people, which is the key and my assumption, too. He'll bring out the best in us, and we can transmit what we receive from him onward, to more people at Iscar. It will be a party."