Berkshire Hathaway to acquire Duracell battery from Procter & Gamble in $4.7 billion stock deal
Berkshire Hathaway agreed to buy the Duracell battery business from Procter & Gamble in chairman Warren Buffett's latest stock swap. Berkshire will turn over $4.7 billion of P&G shares held by Buffett's Omaha, Nebraska-based company, according to a Business Wire statement on Thursday.
Duracell will have about $1.7 billion in cash when the deal is completed, which is expected in the second half of next year, according to the statementThe exchange may help Berkshire cut its holding in Cincinnati-based P&G without incurring the tax costs of selling shares in the open market.
Buffett became one of P&G's biggest shareholders through an investment in Gillette. P&G bought the razor maker in 2005 in a $57-billion deal that the Berkshire chairman supported.
Berkshire held more than 100 million shares as recently as 2008 and cut the stake several times since then as the company faltered under previous CEO Bob McDonald. "I have always been impressed by Duracell, as a consumer and as a long-term investor in P&G and Gillette," Buffett said in the statement.
P&G announced last month that it would divest Duracell. CEO AG Lafley has been streamlining the company, cutting expenses and selling noncore businessesP&G sold its pet-food business and has said it will jettison up to 100 of its slower-selling brands. Paying with shares would mirror two of Buffett's transactions in the past year, when he swapped stock that had appreciated for operating businesses.
He handed over a holding in Phillips 66 in February in exchange for its pipeline-flowimprover unit. In July, he swapped a stake in former Washington Post publisher, Graham Holdings , for cash, a Miami TV station and Berkshire stock that Graham held. Buffett had about 52 million P&G shares at the end of last year, a stake worth more than $4 billion.
