Buffett’s Berkshire nears deal for Precision Castparts

Warren Buffett’s Berkshire Hathaway Inc is nearing an agreement to buy Precision Castparts Corp , in what could be the company’s largest purchase ever, according to a

Sourced through Scoop.it from: www.reuters.com

The purchase of Precision Castparts, which makes aircraft components and energy-production equipment, could be announced as soon as next week and cost more than $30 billion, assuming typical premiums for mergers, according to the Wall Street Journal, which first reported the news. Precision Castparts’ market value was $26.7 billion on Friday.  The addition of Precision Castparts would extend Buffett’s decade-long push into the industrial sector, where he has bought such companies as parts maker Marmon, Israeli toolmaker Iscar, and specialty chemicals company Lubrizol.  –  

Precision Castparts makes components such as nuts, bolts and other fasteners for aerospace companies such as Airbus Group SE (AIR.PA) and Boeing Co (BA.N), an industry that accounts for roughly 70 percent of sales. It also makes products such as pipes and fittings for power and industrial companies.  The company reported a profit of $1.53 billion on net sales of $10 billion for its fiscal year ended March 29.  But it has struggled with slack demand in some businesses, and last month missed analysts’ quarterly profit forecasts as Chief Executive Officer Mark Donegan lamented a “challenging” oil and gas environment.

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