Berkshire Hathaway is increasing its exposure to the housing sector, agreeing to buy Taylor Morrison Home Corporation for US$6.8 billion (A$9.5 billion).
The storied investment company will pay $72.50 in cash per common share, which represents an equity value of $6.8 billion and an enterprise value of $8.5 billion for the United States housebuilder and community housing developer.
The offer represents a premium of 24% to the Taylor Morrison's closing stock price of $58.50 on Friday (Saturday AEST).
The deal reflects Berkshire Hathaway’s enthusiasm for housing, as reflected in the 2003 purchase of Clayton Homes, a $1.7 billion deal masterminded by its legendary Chief Executive Officer Warren Buffet, who has since retired from the role he held for 60 years.
It also represents the deployment of some of its $400 billion of cash.
Berkshire Chief Executive Greg Abel, who took over from Buffet on 1 January this year, said the acquisition would help broaden Berkshire’s footprint into site-built homes, with potential to combine operations over time.
“We are excited to welcome Taylor Morrison into Berkshire’s portfolio,” Abel said in a statement.
“Over time, we expect to unify our site-built homebuilding operations into a combined platform enabling us to deliver the dream of homeownership to more Americans."
Taylor Morrison had a track record over the last 13 years as a public company of strategic growth as it expanded its geographic footprint, integrated acquisitions with discipline and deepened its competitive strengths across procurement, brand and customer experience, Chairman and Chief Executive Officer Sheryl Palmer said.
"Joining Berkshire Hathaway is a once-in-a-lifetime opportunity to propel Taylor Morrison into its next, and most exciting, chapter, supported by Berkshire's unmatched capital strength and long-term investment philosophy,” Palmer said in the statement.
Taylor Morrison will continue to operate under its management team once the transaction closes, which is expected to happen in the second half of 2026.
Before the offer was announced on Friday, Taylor Morrison (NYSE: TMHC) shares closed 23 cents (0.39%) lower at $58.50, capitalising the company at $5.47 billion.
Berkshire Hathaway Inc Class B (NYSE: BRK.B) stock had ended $2.94 (0.62%) down at $474.48 on Friday, valuing the company at $1.02 trillion.
Taylor Morrison has developed 350 communities in 21 markets in 12 U.S. states.
