Berkshire Hathaway’s founder Warren Buffett agreed to buy aerospace parts manufacturing group Precision Castparts for $37.2 billion in a big bet on US manufacturing by the billionaire investor.
This acquisition is Mr Buffett’s biggest since his previous acquisition of Burlington Northern Santa Fe, which operates US’s second biggest rail network for $26 billion in 2009.
According to the WSJ, Mr. Warren Buffett invested in Precision Castparts Corp. only after he was 100% sure that the CEO Mr. Mark Donnegan would run the company. Mr. Buffett is known for investing only in companies which has a strong leadership and a steady growth. Despite Precision’s first quarter displayed poor performance, where it reported a 18% decline in its net income Mr. Buffett went ahead with the deal.
Mr. Buffett’s investment in Precision Castparts Corp. is seen as an important investment as they ramp up to cater to the US energy demand.
“I’ve admired P.C.C.’s operation for a long time,” Mr. Buffett said in a statement on Monday. “For good reasons, it is the supplier of choice for the world’s aerospace industry, one of the largest sources of American exports.”, Mr. Buffett said.
Berkshire will shell out $23 billion of its own cash and the remaining $10 billion would from other sources to fund the deal. Before the deal Berkshire had a cash pile of about $67 billion.