American multibillionaire investor Warren Buffet has just signed his biggest deal ever, agreeing to buy Precision Castparts, the US maker of parts for the aviation industry, for $37.2 billion.
The agreement consolidates Buffet’s aim to move his business into the industrial sector. His company Berkshire Hathaway Inc will acquire all outstanding shares in Precision Castparts for $235 per share in cash. The deal towers over his biggest acquisition previously, the Northern Santa Fe railroad for $27 billion in 2009.
Buffett said Berkshire would use about $23 billion of its own cash and borrow the rest to finance the deal.
“We will have about $40 billion in cash once we get through this. I like to have a lot of cash at all times.”
“This takes us out of the market for an ‘elephant’ for 12 months or so … but we will be buying a few small things in the next six months,” Buffett told CNBC.
He attributes the possibility of deal to the recent fall in oil prices, saying that:
“When you get a chance to buy a wonderful company, there is usually some reason why you are getting that chance. perhaps a slump in oil and gas helps us in this case.”
The company’s shares were trading at $230.85 before the bell on Monday.
