Berkshire Hathaway to acquire flow improver business from Phillips 66 for $1.4 bn
31 Dec 2013
Berkshire Hathaway Inc, the investment arm of Warren Buffett, yesterday agreed to buy flow improver business Phillips Specialty Products Inc (PSPI) from Phillips 66 for around $1.4 billion.
Under the all stock deal, Phillips 66 will receive shares of Phillips 66 common stock currently held by Berkshire. The specific number of shares will be determined by the share price at deal closing.
PSPI specialises in developing polymers to maximise the flow potential of pipelines. This transaction is part of Phillips 66's ongoing portfolio management and supports the company's growth strategy.
''I have long been impressed by the strength of the Phillips 66 business portfolio,'' said Warren Buffett, CEO of Berkshire Hathaway. ''The flow improver business is a high-quality business with consistently strong financial performance, and it will fit well within Berkshire Hathaway.''
''Berkshire Hathaway made a strong offer for our high-performing flow improver business,'' said Greg Garland, chairman and CEO of Phillips 66. ''This transaction optimises our portfolio and focuses growth on our Midstream and Chemicals businesses.''
Phillips 66, which was spun out of US oil and gas giant ConocoPhillips in 2012, is an energy, manufacturing and logistics company with high-performing midstream, chemicals, refining, and marketing and specialties businesses.
The Houston-based company had $51 billion of assets as of 30 September 2013 and employs 13,500 people.