Warren Buffett Buys Aerospace Company for $37.2 Billion
Warren Buffett’s company Berkshire Hathaway announced yesterday it would spend $37.2 billion to acquire Precision Castparts.
In a statement praising the aircraft parts manufacturer, which provides for General Electric as well as Boeing, the 84-year-old business magnate said, "I've admired [Precision Castparts'] 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."
Previously Berkshire had already had a 3-percent stake in the company, which was valued at over $880 million.
As reported by CNN, the $37.2 billion spent on Precision Castparts, which is the most money Berkshire Hathaway has ever spent trying to acquire a company. will include the assumption of all Precision Castparts' debt.
In a note to shareholders written back in February, Buffett expressed his desire to acquire more companies, writing, "Berkshire is now a sprawling conglomerate, constantly trying to sprawl further."
As reported in the Wall Street Journal, Buffett described his acquisition of the aerospace company as a kind of kismet, or at least a meeting of business minds.
Describing his first meeting with Precision Castparts Corp. Chief Mark Donegan, Buffett said he was impressed by Donegan’s knowledge as well as his passion for business, saying “The guy is fantastic,” adding that, “He’s as in love with his company as I am with Berkshire, and that’s saying a lot.”
Donegan, who joined Precision Castparts 30 years ago and has led the company since 2002, is set to keep running the show after the deal takes place. And this plan was vital to Buffett, who said he would never have gone ahead with the deal if he was not “100 percent sure” that Donegan would be in charge for a long time to come.
Donegan sounded satisfied with the deal as well, saying, “We see a unique alignment between Warren’s management and investment philosophy and how we manage PCC for the long term.”
Subscribe to Latin Post!
Sign up for our free newsletter for the Latest coverage!