Less than a month after we mused at Berkshire’s most recent cash hoard which as of March 31 stood just shy of $400 billion, and wondered who Warren Buffett’s replacement Greg Abel will acquire first…
The offer of $72.50 per common share represents a 24% premium to the home builder’s latest closing price on Friday. The deal is expected to close in the second half of this year.
… We got the answer on Sunday afternoon, when Berkshire made known it will acquire homebuilder Taylor Morrison Home Corp. In an all-cash deal worth about $6.8 billion.
Taylor Morrison is one of the largest community developers and homebuilders in the US and also offers financial services like home loans, titles, escrow and insurance to consumers, based on the statement. The firm has more than 350 communities across 12 states. The existing Taylor Morrison management team, including Chief Executive Officer Sheryl Palmer, will continue to lead the firm, according to the statement.
“We are excited to welcome Taylor Morrison into Berkshire’s portfolio,” Greg Abel, chief executive officer of Berkshire Hathaway, stated in a statement Sunday.
It is unclear if the deal signals that Abel believes the bottom for the US housing market is coming, or if Berkshire is buying a homebuilder during a brutal housing labor shortage, giving companies like Taylor Morrison operating leverage despite sky high mortgage rates.
