Warren Buffett Finds A Place To Invest Some Of Berkshire's $100 Billion

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Warren Buffett's Berkshire Hathaway (BRKB) on Tuesday announced that it will take a minority stake in Pilot Flying J, a large truck-stop and travel-center chain, that will eventually grow to 80%, deploying some of the holding company's massive cash stockpile.

[ibd-display-video id=2326102 width=50 float=left autostart=true]Berkshire in August reported that it had accumulated roughly $100 billion in cash, raising questions about how the company would use it. But the company's recent acquisition attempts have been stymied.

Berkshire was outbid by Sempra Energy ( SRE ) for Oncor Electric Delivery, a large electric utility in Texas. And earlier in the year, Buffett-backed Kraft Heinz ( KHC ) dropped its plans to buy Unilever.

Under the terms of Tuesday's deal, Berkshire will take a 38.6% in Pilot Flying J. The Haslam family will continue to hold a 50.1% ownership in the company until 2023. FJ Management will keep an 11.3% stake until that time.

In 2023, Berkshire will snap up an extra 41.4% stake in Flying Pilot J, giving him 80% total. The Haslam family will keep 20% ownership. Other details of the deal were not disclosed.

"Jimmy Haslam and his team have created an industry leader and a key enabler of the nation's economy," Buffett said in a statement. Haslam is also the owner of the Cleveland Browns NFL team.

"The company has a smart growth strategy in place and we look forward to a partnership that supports the trucking industry for years to come," Buffett continued.

Berkshire's class-B shares dipped 0.2% to 185.41 on the stock market today . TravelCenters of America ( TA ), which also operates roadside stops for truckers and motorists, jumped 8.4% to 4.50.

IBD'S TAKE: Berkshire, a hot growth stock on the IBD 50 list , has racked strong profits and is showing favorable technical traits. Will recent hurricanes damage its performance?

Flying Pilot J, which has more than 750 locations in the U.S. and Canada and serves truckers and interstate travelers, would add to Buffett's transportation-related holdings, which include names like American Airlines ( AAL ) and General Motors ( GM ). Buffett also owns a large chunk of oil refining giant Philipps 66 (PSX).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
Referenced Symbols: SRE , KHC , TA , AAL , GM

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