Precision Castparts share price leaps as Warren Buffett makes Berkshire Hathaway's biggest ever acquisition with $37.2bn swoop

 
Clara Guibourg
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The deal trumps the $26bn Buffett spent on Burlington Northern Railroad in 2009 (Source: Getty)

Shares in aerospace manufacturer Precision Castparts Corp (PCC) jumped 19.5 per cent after Warren Buffett confirmed his company, Berkshire Hathaway, will buy it for $37.2bn (£24bn) - the investor's biggest deal ever.

In a statement today, Buffett said he had "admired PCC's operation for a long time".

"It is the supplier of choice for the world’s aerospace industry, one of the largest sources of American exports. Berkshire’s Board of Directors is proud that PCC will be joining Berkshire," he said today.

Berkshire Hathaway is already one of the largest shareholders in Portland-based Precision Castparts, having built up a three per cent stake in the company since 2012.

Under the deal, PCC shareholders will receive $235 per share. The deal is expected to close in the first quarter of next year.

Read more: Deal bonanza as global M&A reaches post-downturn high

"We see a unique alignment between Warren’s management and investment philosophy and how we manage PCC for the long-term," said Mark Donegan, PCC's chairman and chief exec.

Berkshire, which sits atop a nearly $70bn cash pile, is the US' largest conglomerate, with a market capitalisation of $354bn.

Precision Castparts, with almost 30,000 employees, will add a market value of $26.7bn. The company makes components such as nuts and bolts for aerospace companies, but also components for industrial gas turbines.

Prior to this deal, Berkshire Hathaway's largest takeover was Burlington Northern Railroad, which the conglomerate bought in 2009 for $26bn.

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