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Precision Castparts Acquired For $37.2 Billion In Berkshire Hathaway’s Largest Acquisition To Date

On Monday, Warren Buffet revealed what is the largest acquisition he has ever made in his career as an investor, according to a report from The Los Angeles Times. Buffett’s Omaha based diversified holding company, Berkshire Hathaway Inc, agreed to buy Precision Castparts Corporation, one of the top makers of aerospace and energy equipment, for $37.2 billion dollars — a total which includes the company’s debt.

Precision Castparts, based in Portland Oregon, serves companies such as General Electric Co and Boeing Co, and made seventy percent of its sales last year to the aerospace industry. According to an article in Bloomberg Business, the company employs over 30,000 people and made a total of $10 billion of revenue during its last fiscal year. Buffett’s firm, Berkshire Hathaway Incorporated, states that the deal, in which they agreed to buy Precision Castparts for $235 a share in cash, will be closed by early 2016.

Previously, Buffett has acquired other industrial companies, including Iscar Metalworking in 2006 and Lubrizol, a chemical maker, in 2011. Earlier this year, Berkshire backed Heinz’s $40 billion purchase of Kraft Foods. Even so, this is the company’s largest acquisition so far. “I’ve admired PCC’s operation for a long time,” said Buffett in a statement. “It is the supplier of choice for the world’s aerospace industry, one of the largest sources of American exports.”

I’ve admired PCC’s operation for a long time (…) It is the supplier of choice for the world’s aerospace industry, one of the largest sources of American exports.

This transition from its 1990s holdings, including Buffalo News and shoe businesses, to industrial companies has helped Berkshire to accumulate more than $66 billion total. Berkshire Hathaway’s portfolio also consists of Geico insurance, Benjamin Moore paints, Burlington Northern Santa Fe railroad, and See’s Candies. The company once was a major investor in companies such as Coca Cola Co., Wells Fargo & Co. and American Express Co.

Buffett will be reaching 85 years of age this month, and his net worth has been estimated at around $66.5 billion total, according to Forbes magazine, thanks to his legendary investing prowess.

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