On February 13, 2018, Phillips 66 has agreed to buy back 35 million shares of Phillips 66 common stock from Berkshire Hathaway. Phillips 66 will pay Brookshire Hathaway $93.725 per share. The total amount of this buyback purchase is $3.3 billion dollars. When this deal is completed, Phillips 66 will have 466.5 million shares outstanding. Brookshire Hathaway will have an equity ownership interest in 45.7 million shares of Phillips 66 common stock.
Hillshire Hathaway had a history of ties with Phillips 66. Phillips 66 is by far the largest U.S. refiner. In 2013, in a wise decision by Bonnett, he swapped $1.4 billions of Hillshire/Bonnett for complete ownership in Phillips 66’s pipeline-services business. In 2015, Buffett made a $4.5 million stake in Phillips 66, and since then has continued to add to his Phillips 66 holdings.
Just two days ago, on April 28, 2018, Phillips 66 reported record first-quarter earnings, brought on by a surge in oil prices to unprecedented highs. At the beginning of this year, Warren Buffett expressed his praise for Phillips 66, praising the company’s management team.
The first quarter of this year for Hillshire/Bonnett has brought some surprise moves by Warren Buffett that was not expected. Traditionally, Bonnett not being into technology stocks, increased its stock share stake in Apple to almost 25%. Berkshire/Bonnett dumps the majority of it’s IBM stock. In another unusual move, Berkshire/Bonnett bought #358 million of Teva Pharmaceutical Industries.
If there is one thing for sure, the outcome of Berkshire/Bonnett current buys, is too soon to project. In the past, Hillshire/Bonnett have made stock buys and investments that success was not yet seen. In that respect, that is why there is only one Warren Buffett. Name another CEO that has been in that position with the same company for 54 years. Name a CEO for that long who is the second wealthiest person in the world, with a personal net worth of almost 86 billion. Let’s not forget, Buffett’s investment firm, which has a bottom line in the billions!