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Berkshire Hathaway to acquire Phillips 66 flow improver business

  • Berkshire Hathaway (BRK.A, BRK.B) agrees to acquire the flow improver business of Phillips 66 (PSX) in exchange for PSX stock Berkshire already owns; the specific number of shares will be determined by the share price at deal closing, expected sometime during H1 2014.
  • The unit, Phillips Specialty Products, makes polymers designed to reduce drag and increase the flow potential in pipelines; Warren Buffett calls it "a high-quality business with consistently strong financial performance," and he plans to install Lubrizol CEO James Hambrick to oversee strategic direction.
  • Berkshire owns a 27.2M-share stake in PSX, or 4.5% of outstanding shares; Reuters reports Berkshire will use ~19M shares, or ~$1.4B.
Comments (18)
  • idkmybffjill
    , contributor
    Comments (1547) | Send Message
     
    A win-win....Buffett gets a good deal using appreciated stock (thus avoiding taxes had he sold it to pay in cash), and PSX gets to reduce its shares.
    30 Dec 2013, 05:48 PM Reply Like
  • Seek444
    , contributor
    Comments (19) | Send Message
     
    Base on the Market cap 44.08B x 4.5% today, so it is worth about 2 billions dollars, it probably won't draw down much on Berkshire cash...hopefully Berkshire can land a bigger buy soon...
    30 Dec 2013, 06:09 PM Reply Like
  • TBKV
    , contributor
    Comments (9) | Send Message
     
    I own BRK.B and PSX stock, I guess nothing changes for me.
    30 Dec 2013, 06:27 PM Reply Like
  • Michael Fitzsimmons
    , contributor
    Comments (8085) | Send Message
     
    Wow - I know about 10 good reasons to own PSX, and this wasn't even one of them!
    30 Dec 2013, 06:49 PM Reply Like
  • psychological-dividends
    , contributor
    Comments (544) | Send Message
     
    Long BRK.A
    30 Dec 2013, 07:00 PM Reply Like
  • chopchop0
    , contributor
    Comments (3108) | Send Message
     
    Not a baller enough to own A shares, but I am long both BRK.B, PSX and COP.

     

    Sounds like a win-win to me. One quality company acquiring part of the assets of another
    31 Dec 2013, 09:34 AM Reply Like
  • psychological-dividends
    , contributor
    Comments (544) | Send Message
     
    I'm such a moron. I sold Conoco right before the split, I should have held my shares.
    31 Dec 2013, 12:17 PM Reply Like
  • U2A Ventures
    , contributor
    Comments (141) | Send Message
     
    buffett continues to be a god
    30 Dec 2013, 07:06 PM Reply Like
  • RWMostow
    , contributor
    Comments (1319) | Send Message
     
    ifjic-

     

    Buffett may be very successful as an investor, but I would never elevate him to a deity.

     

    -rwm
    30 Dec 2013, 08:00 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1547) | Send Message
     
    RWMostow is right - Buffett is not a god, Bill Ackman is. ;-)
    30 Dec 2013, 08:51 PM Reply Like
  • RWMostow
    , contributor
    Comments (1319) | Send Message
     
    idkmy-

     

    "...Bill Ackman is."

     

    For sure, only Ackman would know.

     

    -rwm
    30 Dec 2013, 09:10 PM Reply Like
  • FleetUSA3226
    , contributor
    Comments (672) | Send Message
     
    May help offset hit BRK has from Dakota train wreck today.
    30 Dec 2013, 07:36 PM Reply Like
  • SA_Member_814698
    , contributor
    Comments (15) | Send Message
     
    Hopefully the shares 66 receives will be used to truly reduce 66's outstanding shares...NOT used to provide for the executives' stock option plans...thus eventually resulting no real reduction in outstanding shares.
    30 Dec 2013, 11:28 PM Reply Like
  • psychological-dividends
    , contributor
    Comments (544) | Send Message
     
    It's hard to tell. It all depends on what management is looking to acheive.
    31 Dec 2013, 12:17 PM Reply Like
  • Invest Rookie
    , contributor
    Comments (43) | Send Message
     
    You think the Phillips Specialty Products
    31 Dec 2013, 01:38 AM Reply Like
  • Invest Rookie
    , contributor
    Comments (43) | Send Message
     
    You think that Phillips Specialty Products will then be integrated with BH's Lubrizol??
    31 Dec 2013, 02:20 AM Reply Like
  • bitchyq
    , contributor
    Comment (1) | Send Message
     
    what am I missing? why is it good to sell a profitable business for short-term gain???
    31 Dec 2013, 04:28 AM Reply Like
  • arthur_bishop1972
    , contributor
    Comments (2138) | Send Message
     
    Maybe someone is a trader rather than an investor. With the market where it is, there are worse ideas out there.
    1 Jan, 05:45 PM Reply Like
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