) announced that it has entered into an agreement with
Berkshire Hathaway Inc.
) to divest its wholly owned subsidiary Phillips Specialty
Products Inc. ("PSPI"). Following regulatory review, the
transaction is expected to close in the first half of 2014.
Per the agreement, Phillips 66 will exchange all of its common
stock in PSPI for approximately 19 million shares of its common
stock owned by Berkshire Hathaway. The company expects PSPI's
balance sheet at closing to include approximately $450 million of
cash and cash equivalents.
However, the exact number of Phillips 66 shares to be
delivered by Berkshire Hathaway, and the amount of PSPI's cash
and cash equivalents, will be determined with reference to the
volume-weighted average price of Phillips 66 common stock on the
closing date of the transaction.
PSPI, a wholly owned subsidiary of Phillips 66, operates the
company's flow improver business. It focuses on the science of
drag reduction, specializing in maximizing the flow potential of
The strength of Phillips 66's business model reflects its
commitment to return value to shareholders along with its strong
cash generation capabilities. Phillips 66 has a good capital
deployment policy through share repurchase and payment of
dividends. We believe that the Berkshire transaction will boost
investor confidence in the stock, and drive shareholder value.
Phillips 66, an independent publicly traded company, was formed
after the spin-off of the refining/sales business of
) in 2012. The move resulted in the creation of the largest
refining company in the U.S. and the largest exploration and
production player based on oil and gas reserves.
Phillips 66, is headquartered in Houston, Texas. In addition to
the refining, marketing and transportation businesses, the
company has emerged as an integrated downstream company with most
of the Midstream and Chemicals segments as well as power
generation and certain technology operations included in the
Emerging Businesses segment. Phillips 66 currently retains a
Zacks Rank #3 (Hold).
In addition to Phillips 66, one can consider an energy sector
Clayton Williams Energy, Inc.
) which currently sports a Zacks Rank #1 (Strong Buy).
BERKSHIRE HTH-A (BRK.A): Free Stock Analysis
BERKSHIRE HTH-B (BRK.B): Free Stock Analysis
CONOCOPHILLIPS (COP): Free Stock Analysis
WILLIAMS(C)ENGY (CWEI): Free Stock Analysis
PHILLIPS 66 (PSX): Free Stock Analysis Report
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