Buffett Snaps Up Duracell in $3B Deal

Warren Buffett's Berkshire Hathaway Inc. is buying Duracell from Procter & Gamble in a deal valued at approximately $3 billion. Berkshire has been a significant P&G shareholder since the consumer products firm acquired Gillette in 2005, but the Duracell acquisition will use nearly all of Berkshire's 52.48 million shares; Buffett has estimated that Berkshire's P&G stake cost it roughly $336 million. "I have always been impressed by Duracell, as a consumer and as a long-term investor in P&G and Gillette," Buffett said in a statement today. Berkshire already owns a number of well-known consumer brands in its portfolio of more than 80 businesses, including Fruit of the Loom, Geico, Helzberg Diamonds, and half of the HJ Heinz Co.

P&G, the world's biggest consumer products maker—its products include Tide and Pampers—has been trimming its product lineup to focus on its top performers. After it finishes jettisoning more than half its brands around the globe over the next year or two, P&G has said it will retain 70 to 80 brands. The company had announced last month that it wanted to make Duracell, which it acquired in 2005, a stand-alone company. P&G will receive shares of its own stock that are currently held by Berkshire Hathaway (those shares are currently valued at about $4.7 billion). Offsetting that price, P&G will contribute about $1.7 billion to the Duracell business before the deal closes. The transaction is expected to close in the second half of 2015. (More Berkshire Hathaway stories.)