In order to expand its reach and expertise, Berkshire Hathaway Inc. (NYSE:BRK.A) has decided to buy 8.7% stake in Axalta Coating. As per the reports, Berkshire has agreed to pay $560 million to controlling shareholder Carlyle Group for acquiring this stake.
How The Market Responded:
As soon as the news made to electronic and digital media, the shares of Axalta jumped by 4.1% in pre-market trading. Berkshire Hathaway is owned and run by the multi-billionaire Warren Buffet, who is considered as one of the best investment experts in today’s time. He hardly makes any investment that doesn’t pay him return. Buffet’s investment in Axalta is a brave step at this point of time.
It is a part of Buffet’s expansion plan, which he announced last year stating that Berkshire would eye bigger deals in the near future to expand its conglomerate.
As per the reports, Berkshire Hathaway has decided to buy 20 million shares at $28 per unit. The offered price is a little less than the closing price of company’s stocks on Monday. If taken into consideration the regulatory filing, the total shares owned by Carlyle sum up to 170.3 million units or 74.1% stake in the company. The data was last updated on December 31, 2014.
Carlyle bought Axalta from DuPont in 2013 for $4.9 billion. The company is active in making powder and liquid coatings for the transportation and automotive companies located all over the world.
Berkshire Hathaway Inc. (NYSE:BRK.A) has strengthened its reputation as a potential acquirer. It doesn’t let any investment opportunity go wasted. The last acquisition of Berkshire was Lubrizol Corp., which it bought in 2011 for $9 billion. Carlyle had decided to sell Axalta to Akzo Nobel NV, a Dutch paint maker right after it went it went public in 2014. The information was first revealed by Bloomberg in September 2014.