Berkshire Hathaway Inc. announced Thursday that it has entered into a definitive agreement to acquire the Duracell battery business from the Procter & Gamble Company. Following the announcement, shares of P&G edged down 0.09 percent, to $89.40, while Berkshire Hathaway's B shares edged up 0.41 percent, to $146.12, in premarket trading.
“I have always been impressed by Duracell, as a consumer and as a long-term investor in P&G and Gillette,” Berkshire Hathaway CEO Warren Buffett said in a press release.
Procter & Gamble, which is one of Berkshire Hathaway's biggest stock holdings, will receive shares of P&G's common stock currently held by Berkshire, which has a value of nearly $4.7 billion. P&G said it would contribute nearly $1.7 billion in cash to recapitalize Duracell before the transaction.
Procter & Gamble first announced it would pursue a spinoff of the Duracell battery brand into a stand-alone company during its quarterly earnings announcement in October, the first step in a plan to shed up to 100 of the company’s nearly 200 brands.
“Duracell is a leading global brand with top-quality products, and it will fit well within Berkshire Hathaway,” Buffett said.
The transaction is expected to close in the second half of 2015 and is subject to regulatory approvals.