Berkshire Hathaway’s Acquisition of Taylor Morrison Home Corp.
Berkshire Hathaway announced on Sunday that it will acquire Taylor Morrison Home Corp. in an all-cash deal valued at approximately $8.5 billion, marking a significant move into the housing sector for the conglomerate.
Under the agreement, Berkshire will buy the homebuilder for $72.50 per common share, bringing Taylor Morrison’s stock valuation to around $6.8 billion. This offer represents a notable premium of about 24% compared to the company’s closing stock price of $58.50 last Friday.
This acquisition underscores Berkshire’s long-standing interest in the housing market, particularly highlighted by its purchase of Clayton Homes in 2003.
Greg Abel, Berkshire’s CEO, expressed enthusiasm about welcoming Taylor Morrison to the company’s portfolio, indicating that the acquisition could broaden access to homeownership while strengthening Berkshire’s field-built home business.
Cheryl Palmer, the CEO of Taylor Morrison, commented that this deal would provide necessary financial backing and align well with the long-term nature of housing development projects. She also highlighted Berkshire Hathaway’s commitment to long-term investments as a perfect fit for the cyclical aspects of homebuilding.
Taylor Morrison, which became a public entity in 2013, is involved mainly in home construction and lifestyle community development across 12 states. As per LSEG data, the company’s market capitalization currently stands at about $5.47 billion.
Post-acquisition, Taylor Morrison will operate under its current leadership team, including Palmer, and transition into a private entity. The companies anticipate completing the transaction within the latter half of the year, with Goldman Sachs and Morris serving as financial advisors to Taylor Morrison for this deal.
