Warren Buffett’s company Berkshire Hathaway is ready to make one of its most expensive deals to date: acquiring Precision Castparts, an airplane parts maker for more than $30 billion.
The potential deal was first reported by the Wall Street Journal, and Berkshire Hathaway and Precision Castparts did not return calls seeking comment. The Journal said the deal could be announced as soon as this week.
In order to the Warren Buffet’s Berkshire Hathaway with a solid and long term investment, the strategic decision to buy a specialised manufacturing company seems the perfect deal.
There are many reasons why this deal must be the right one; first of all it is a good long term asset, an investment for the next century, also because Precision Castparts has long term relationship with the big airplane makers (Boeing Co. and Airbus Group SE) and a huge company such as General Electric.
Moving from buying stocks to investing in companies with prospects for the next decades is part of the phase two, as Buffet explained to its investors at his annual meeting last year. The aim is to create a sort of build-up value, that can provide additional workforce and future increasing revenues, related to the industrial business of part making for aerospace and energy industries.
Further developments and announcements should come out this week, but what’s sure is that this deal aims to turn Berkshire into a Huge conglomerate industrial group, and this would be the sixth big industrial company owned by Berkshire.
Source: The Wall Street Journal