Berkshire Hathaway (BRK.A, BRK.B) has announced that it will acquire the Duracell battery business from Procter & Gamble (PG) plus $1.7 billion in cash in exchange for its PG shares valued at $4.7 billion. This is very similar to its recent deals for subsidiaries of Phillips 66 (PSX) and Graham Holdings (GHC) which were tax efficient transactions.
Warren Buffett has stated: “I have always been impressed by Duracell, as a consumer and as a long-term investor in P&G and Gillette. Duracell is a leading global brand with top quality products, and it will fit well within Berkshire Hathaway.”
PG had previously said that it was looking to exit its Duracell battery business as part of a larger plan to divest up to half its brands to simplify and speed sales growth. Duracell has the largest market share in the battery market with $2.2 billion in annual sales.