Berkshire Hathaway and Precision Castparts Corp have agreed to a US$37.2bn takeover
The boards of Berkshire Hathaway and oil and gas pipeline manufacturer Precision Castparts Corp (PCC) have unanimously approved a definitive agreement for Berkshire Hathaway to acquire, for $235 per share in cash, all outstanding PCC shares.
Completion of the deal, which has an estimated value of US$37.2 billion including outstanding PCC net debt, is subject to approval by a majority of PCC’s outstanding shares.
“I’ve admired PCC’s operation for a long time. For good reasons, it is the supplier of choice for the world’s aerospace industry, one of the largest sources of American exports. Berkshire’s Board of Directors is proud that PCC will be joining Berkshire,” said Warren E. Buffett, Berkshire Hathaway chairman and chief executive officer.
“We are very pleased to be joining forces with Berkshire Hathaway,” said Mark Donegan, PCC’s chairman and chief executive officer.
“We see a unique alignment between Warren’s management and investment philosophy and how we manage PCC for the long-term.
We believe that as part of Berkshire Hathaway, PCC will be exceptionally well-positioned to support our customers’ needs into the future.
This transaction offers compelling and immediate value for our shareholders, and allows PCC’s employees to continue to operate in the same manner that has generated many years of exceptional service and performance to our customers.”
The deal is expected to be closed during the first quarter of 2016, subject to clearance under the Hart-Scott-Rodino Act and competition clearance in certain jurisdictions outside the US.
PCC will continue to do trade internationally under the Precision Castparts name and remain headquartered in Portland, Oregon.
Berkshire Hathaway’s activities include insurance and reinsurance, utilities and energy, freight rail transportation, finance, manufacturing, retailing and services.
Precision Castparts Corp. is a worldwide, diversified manufacturer of complex metal components and products including titanium and nickel superalloy melted and mill products for the several industries including oil and gas. It also manufactures extruded seamless pipe, fittings, and forgings for power generation and oil and gas applications.