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.
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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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