Major aerospace component manufacturer Precision Castparts Corp. [PCC] is being sold to Berkshire Hathaway for $37 billion, the companies said Monday.
At $235 dollars per share for the outstanding PCC shares Berkshire doesn’t already own, the acquisition is the largest in billionaire investor and Berkshire chief executive Warren Buffett’s career.
PCC is the industry leader in building castings used to build jet engines. Its largest customers are aerospace industry giants Lockheed Martin [LMT], Northrop Grumman [NOC] and Boeing [BA]. PCC also builds unmanned aerial vehicle airframe and engine components.
“I’ve admired PCC’s operation for a long time. For good reasons, it is the supplier of choice for the world’s aerospace industry, one of the largest sources of American exports,” Buffett said in a statement announcing the deal.
As recently as a month ago, PCC was itself expanding. It announced in July the purchase of Composites Horizons, LLC (CHI), which makes high-temperature carbon and ceramic composites, primarily for use in commercial aircraft engines.
Under the deal, Berkshire will take over PCC’s 157 worldwide manufacturing facilities, which employ 29,350 people, according to the latter’s website. PCC will be allowed to keep its name and its Portland, Ore., headquarters.
Mark Donegan, PCC’s chief executive officer, said the company’s employees would be allowed to operate as normal through and after the completion of the deal, which is scheduled to close in first quarter 2016.
“We are very pleased to be joining forces with Berkshire Hathaway,” said Mark Donegan, PCC’s chairman and chief executive officer. “We believe that as part of Berkshire Hathaway, PCC will be exceptionally well-positioned to support our customers’ needs into the future. This transaction … allows PCC’s employees to continue to operate in the same manner that has generated many years of exceptional service and performance to our customers.”