Warren Buffett's Berkshire Hathaway acquires stake in Haslam family's Pilot Flying J

Warren Buffett's Berkshire Hathaway acquires stake in Haslam family's Pilot Flying J

Warren Buffett's Berkshire Hathaway acquires stake in Haslam family's Pilot Flying J

Pilot Flying J is now the largest operator of travel centers across North America, with locations along major highways and smaller transit routes alike.

Pilot Travel Centers will remain headquartered in Knoxville, Tennessee, and Jimmy Haslam will remain as its chief executive. Initially, Berkshire will buy 38.6 percent of the company, but in 2023 that will increase to 80 percent. Their market capitalizations value them anywhere from a discount to revenue (Sears, of course) to almost double their revenue - which implies Pilot Flying J could be a sizable acquisition for Berkshire once it gains control.

Financial terms weren't disclosed, so it wasn't immediately clear how much of Berkshire's roughly $100 billion in cash will be used.

Pilot Flying J has "created an industry leader and a key enabler of the nation's economy", Buffett said in a statement. "[He] has a smart growth strategy in place and we look forward to a partnership that supports the trucking industry for years to come".

Should both Gov. Haslam and Rep. Marsha Blackburn announce their candidacies for the Republican nomination for the U.S. Senate, it will set up an epic battle between establishment Republicans, who will back Haslam, and Trump supporters, who will back Blackburn.

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Jimmy Haslam praised Berkshire as a good partner in a release.

"He truly wants us to run the company, wants us to maintain the culture, and of course, if there is an opportunity for us to grow the company substantially, he's got plenty of capital", Haslam said on CNBC.

In 2023, Berkshire Hathaway will buy an additional 41.4% equity stake and become majority shareholder, leaving the Haslam family with a 20% stake.

Berkshire is an eclectic conglomerate that owns more than 90 businesses, including Geico insurance, BNSF railroad, and several utilities and manufacturers.

This is why it makes sense for Pilot Flying J to have the financial backing of Berkshire amid the competitive pressure. And he said Pilot Flying J fits that model well. At that point, the Haslam family will retain a 20-percent share and remain involved in the operation.

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