“This means we have to reload over the next 12 months or so… but we will be buying a few small things in the next six months”, he said.
The offer price of $235 per share represents a 21.2 percent premium over Precision Castparts’ closing price of $193.88 on Friday.
The shares were trading at $231.56 before the bell on Monday.
The Oregon-based Precision Castparts, which has a market capitalization of $26.7 billion, makes equipment for the aerospace and energy industries, including Airbus and Boeing.
Precision Castparts will become a unit of Berkshire, keeping its name and Portland headquarters.
Precision Castparts’ stock leaped $37 in premarket trading to $230.90 in anticipation of the deal.
The transaction requires the approval of the majority of Precision’s shareholders, which is expected to take place during the first quarter of next year.
“From the Berkshire perspective, they’re getting a good company on sale”, Shields said.
Mark Donegan, Precision’s chairman and chief executive, said: “We see a unique alignment between Warren’s management and investment philosophy and how we manage Precision for the long term”.
The 84-year-old, known as “The Oracle of Omaha”, told CNBC on Monday he would have bought the company even without the energy slump that reduced its share price over the a year ago.
Mallinckrodt Plc (MNK) slid 0.07% $100.31 after the Ireland-based specialty pharmaceutical company agreed to acquire Therakos, Inc. a leading immunotherapy company in a transaction valued at approximately $1.33 billion. PCC brought in slightly more than $10 billion in revenues in its most recent fiscal year, with aerospace accounting for 70 percent of that business.
Here are some of the major acquisitions engineered by Buffett, 84, the world’s third richest person with net worth of $72.7 billion, according to Forbes.
Buffett in a statement said he has been monitoring Precision for some time, calling it a company he admires.
Media companies Disney (+1.5 percent), Time Warner (Xetra: AOL1.DE – news) +(2.5 percent) and Viacom (+3.2 percent) rose, as did the solar energy company, SunEdison (+4.2 percent). If the deal goes through, it would be the biggest buy-out Berkshire has made.
Berkshire was a long-term shareholder of Precision Castparts Corp. After all, the stock of the company is down by almost 20% since the beginning of the year, excluding today’s pre-market gain. The $37 billion deal would be one of Berkshire’s largest acquisitions ever.