The industrials sector rose 1.81 per cent, buoyed by Precision Castparts, which also give the third biggest boost to the S&P 500. The Oracle of Omaha’s Berkshire Hathaway is paying $37 billion, including debt, for aircraft components maker Precision Castparts.
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“Most people see (Precision’s challenges) as temporary issues that, over time, will solve themselves”, Groh said. The acquisition of the aerospace company would be one of Buffett’s largest deals ever. His Nebraska-based conglomerate, Berkshire Hathaway, has bought a diverse range of companies from insurer Geico to the Burlington Northern Santa Fe railroad to ice cream chain Dairy Queen.
“And that’s a unique, distinctive feature of Buffett’s strategy and Berkshire’s management philosophy”. The company, which employs about 200 people, makes carbon and ceramic parts for aerospace engines.
From the Berkshire perspective, they’re getting a good company on sale, Shields said.
The price being paid represents $235 a share, compared with Friday’s closing price of $194.
But its business, often literally involving nuts and bolts, fits the profile of Berkshire’s typical acquisitions. “We’re planning to hold it forever, so we don’t really look at the short-term outlook in terms of making decisions on stocks or businesses”, he said.
“Fed Chair Janet Yellen has stated she expects conditions to jell, justifying a start to policy normalization sometime later this year”, Lockhart said in a speech in Atlanta.
Shares of Precision Castparts shares moved up19. But the vast majority of its business is in the aerospace industry.
But other analysts said the price appeared fair. You need JavaScript enabled to view it.
Berkshire, which also owns PacifiCorp, another former Fortune 500 company based in Portland, tends to grant its companies wide latitude to maintain their identities and local operations.
Has Buffett made a good deal? Schoonmaker said once Berkshire buys a company, it has a history of investing in that business. Berkshire Hathaway and Brazilian private-equity firm 3G Capital Partners had teamed up to buy Heinz two years earlier.
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Dairy company Dean Foods fell 2.9 percent as second-quarter net income came in at $26.5 million, compared with a loss of $645,000 in the year-ago period.
