In its most recent fiscal year ending in March 2015, 70% of the company’s revenues came from the aerospace industry.
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On Monday morning, Warren Buffett’s Berkshire Hathaway Inc. confirmed a $32 billion cash purchase of Precision Castparts Corp. Assuming it wins PCC shareholder approval and antitrust muster in both the U.S. and “certain foreign jurisdictions”, Berkshire expects the deal to close in Q1 of 2016. The Nasdaq composite climbed 59 points, or 1.2 percent, to 5,102.
LOSING STREAK: The Dow is rebounding from a seven-day losing streak, the longest run of losses in four years. A slump in oil prices and some mixed earnings reports have weighed on the 30-member index.
“I think the Fed is desperate to raise rates this year and I think it will happen in September“.
According to the Precision Castparts website, the Huntington plant is Special Metals’ principal production site in the U.S. It is supported by a smaller facility near Ashland, Kentucky, and one at Elkhart, Indiana.
Shares of Precision Castparts soared 19% in premarket trading on the news Monday.
Berkshire is paying $235 per share for PCC, a 21 percent premium on the stock’s $193.88 closing price Friday. Shares of the company jumped nearly 20 percent overnight, making Buffett money, even before the acquisition was complete.
Other industrial companies that Buffett has bought in the last decade include toolmaker Iscar, parts maker Marmon, and speciality chemicals company Lubrizol.
That’s a good sign for some investors. “Mostly you see it pronounced in the cyclical sectors… anything tied to China and the commodities’ complex”, said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. “Everything else is doing pretty well”.
The social media company got a lift after the company signed a two-year content and advertising deal with the National Football League.
It would also give Berkshire ownership of 10 companies that standing alone would be big enough to join the Fortune 500, plus 26.9 per cent of Kraft Heinz Co.
Chinese producer prices in July hit their lowest point since late 2009, while exports tumbled 8.3 percent, stoking expectations of more action from the central bank after months of intervention by authorities to tame its unruly stock market.
“U.S. yields are modestly higher, but dollar/yen needs more widening of the interest rate spread to take it higher”, said Jeremy Stretch, head of currency strategy at CIBC World Markets.
IBM rose 1.7 percent to $157.69 after Buffett’s comments on CNBC were interpreted to mean that he would be interested in buying more IBM stock.
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In other markets, gold futures added 0.9 per cent to $US1,104.10 an ounce. Berkshire “B” shares were down 0.7 per cent at US$142.52.
