Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
Find Stocks Now

Berkshire paid $2.6 billion for Haslam family's remaining 20% Pilot stake

Published 02/24/2024, 12:13 PM
Updated 02/24/2024, 12:21 PM
© Reuters. FILE PHOTO: Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc's annual shareholder meeting in Omaha, Nebraska, U.S., May 4, 2019. REUTERS/Scott

By Jonathan Stempel

NEW YORK (Reuters) - Berkshire Hathaway (NYSE:BRKa), the conglomerate led by billionaire Warren Buffett, paid $2.6 billion last month for the 20% of the Pilot Travel Centers truck stop business it did not already own, after resolving a lawsuit over the price.

The price means Berkshire paid about $13.6 billion for Pilot, which operates more than 725 locations in the U.S. and Canada, and sold 13 billion gallons of fuel in 2022.

Berkshire disclosed the purchase price in its annual report on Saturday.

Pilot, sometimes known as Pilot Flying J, had been founded in 1958 by Jim Haslam after he paid $6,000 for a Virginia gas station. It was later run by Jimmy Haslam, the billionaire owner of the Cleveland Browns football team.

Berkshire paid $2.76 billion in 2017 for 38.6% of Pilot and $8.2 billion for another 41.4% in January 2023, and subsequently overhauled its management.

Pilot, based in Knoxville, Tennessee, added $603 million to Berkshire's profit in 2023.

The Haslams had an annual 60-day window to sell their last 20% of Pilot, with the price based on its profits.

In competing lawsuits in Delaware Chancery Court, each side accused the other of manipulating Pilot's accounting in bad faith, with the Haslams saying Berkshire was undervaluing its stake, and Berkshire concerned it might overpay.

Buffett did not mention Pilot in his annual letter to Berkshire shareholders, also released on Saturday, but offered an anecdote about the risk of disappointment in acquisitions.

He recalled how Hugh McCulloch, the first comptroller of the United States, warned national banks in 1863 not to deal with a "rascal" even if they believed they could avoid being cheated.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

"Many bankers who thought they could 'manage' the rascal problem have learned the wisdom of Mr. McCulloch's advice--and I have as well," Buffett said. "People are not that easy to read. Sincerity and empathy can easily be faked. That is as true now as it was in 1863."

Berkshire did not immediately respond to a request for comment on Saturday.

Buffett said last May that he wished he could have bought all of Pilot in 2017, but the Haslams did not want to sell.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.