Story updated with analyst comment.
NEW YORK (
is picking up the 19.9 percent stake the insurer does not already own in
for $547.6 million.
The deal is both in cash and stock deal, giving each Wesco shareholder $386.55 per share in either cash or Berkshire Class B common stock. Wesco shareholders will also get considerations for monthly earnings, according to Berkshire press release.
"The price is a little higher than anticipated," said Stifel Nicolaus analyst Meyer Shields. "What is interesting is they are using stock. For a long time when you had a whole
deal going on Buffett was negative using stock, and now they are using stock to pay for acquisitions. It means your stock isn't where it should be."
This is the second acquisition that offers stock instead of all cash. The first was
The merger is expected to be finalized in early June.
The transaction has been in the works since Berkshire bought a majority stake in Wesco for more than $30 million about 30 years ago. The buyout bid for the remaining stake was presented in September.
Wesco is run by CEO Charlie Munger, Berkshire's vice chairman and
long time partner. Munger is now 87.
--Written by Maria Woehr in New York.
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