Berkshire Hathaway to Purchase Duracell from P&G

Berkshire Hathaway, Warren Buffett’s investment company, has come to an agreement to purchase Duracell, the battery company, from Procter & Gamble. This deal comes only a month after the computer products business decided to sell the asset.

The Berkshire Hathaway conglomerate, which owns railroads, retailers, insurance companies and other businesses, believes that the deal is going to close near the end of the second half of 2015. The terms of this deal are somewhat complex: Procter & Gamble agrees to put about $1.7 billion worth of cash into Duracell at the closing, and during the exchange, it will receive roughly $4.7 billion worth of Procter & Gamble stock that Berkshire Hathaway currently owns.

Berkshire Hathaway is currently one of the top investors in Procter & Gamble, and at this time they own 52.8 million shares, which are a little bit less than 2% of the outstanding P&G stock, according to MorningStar data.

“I have always been impressed by Duracell, as a consumer and as a long-term investor in P&G and Gillette,” said Warren Buffett in a statement that he prepared.

Late last month, Procter & Gamble indicated that it would sell the Duracell brand, as part of a plan that the company has to slim down its slate of products. The exit plan began when Procter & Gamble came to an agreement to sell its interest in a joint venture battery company in China that occurred in a deal in late August. The terms of this deal were never disclosed, although Procter & Gamble said it booked a charge of $932 million, which is in relation to this deal.

During that time, they did not finalize the second step. Procter & Gamble said that they hoped to split off Duracell as part of a stand-alone business, but also mentioned that they would consider a sale or different alternatives if they “generated equal or better value.”

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