Berkshire Hathaway Buying 38.6% Stake in Pilot Flying J
October 03 2017 - 10:12AM
Dow Jones News
By Cara Lombardo
Warren Buffett's Berkshire Hathaway Inc. on Tuesday said it
agreed to buy a minority stake in the operator of Pilot and Flying
J travel centers and become the private firm's majority owner in
2023.
Berkshire didn't disclose how much it is paying for its initial
38.6% stake in Pilot Travel Centers LLC, which operates 750 travel
centers along U.S. and Canadian roadways and generates more than
$20 billion in annual revenue.
Berkshire and Pilot said the Haslam family will continue to hold
a 50.1% stake in Pilot, and Jimmy Halsam will remain chief
executive. FJ Management Inc., owned by the Maggelet family, will
hold an 11.3% stake in Pilot, the companies said.
In 2023, Berkshire Hathaway is expected to buy an additional
41.4% stake in Pilot and become the majority shareholder. The
Haslam family will remain involved with a 20% stake, the companies
said.
"Pilot Flying J is built on a longstanding tradition of
excellence and an unrivaled commitment to serving North America's
drivers," said Mr. Buffett. "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."
The investment is Berkshire's latest bet on transportation. In
addition to running a railroad, Mr. Buffett's Nebraska conglomerate
owns a 15.8% stake in refiner and oil- and gas-pipeline operator
Phillips 66. It also is heavily invested in industrial
manufacturers and consumer brands that rely on transportation
networks to deliver their products, including Kraft Heinz Co. and
Fruit of the Loom.
Pilot Flying J was shaken by a scandal beginning in 2013 when
Pilot staff members were accused of defrauding trucking-company
customers that bought diesel at its truck stops by shorting rebate
money Pilot owed them. Pilot later accepted responsibility and
settled with the federal government for $92 million.
Write to Cara Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
October 03, 2017 09:57 ET (13:57 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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