Warren Buffett recently disclosed Phillips 66 huge stake of $4.5 billion or so, Buffett said that Berkshire Hathaway was able to buy it on a tax-advantaged basis. He said that they bought as the price became right.
Buffett clarified that Berkshire Hathaway was not buying Phillips 66 as a refiner. He also clarified that this was buying because he likes the management team and likes where the company is placed. On whether Berkshire Hathaway would ever just acquire Phillips 66, Buffet said: “That would be a long stretch from here … we think they would be very happy to be independent.”
24/7 Wall St. noted recently what Buffett sees in Phillips 66 that the rest of us might not see. Another consideration on why Buffett would not likely acquire Phillips 66 outright: its market cap is $42 billion today. When you add in a premium, it is way above and beyond what would leave Buffett with a $20 billion cash cushion, when you consider the Precision Castparts acquisition tally of $37 billion.
Originally Aired: 09-08-15