Updated from 10:00 a.m. to include additional information regarding financials throughout the story.
NEW YORK (TheStreet) -- Billionaire Warren Buffett just pulled off another elegant deal for the ages.
To acquire Procter & Gamble's (PG) Duracell battery business, Buffett's Berkshire Hathaway (BRK.B) (BRK.A) said Thursday it is paying about $4.7 billion in P&G stock, a roughly 1.9% stake, currently held by the billionaire investor's holding company. That's stock that had been paying a yield of about 2.9%, or roughly $135 million a year.
To convince Buffett that it was worth his money to let go of that yield, P&G will capitalize Duracell with $1.7 billion in cash at the close of the deal.
For Berkshire, the deal allows Buffett to monetize about 99% of his stake in P&G, roughly 52.3 million shares, without incurring the tax expenses of selling those shares back to the market. Additionally, Berkshire acquires a global brand that fits with his stakes in other consumer products such as Coca-Cola (KO) and H.J. Heinz as well as owning See's Candies, Fruit of the Loom, and Geico insurance.
"The deal isn't material to Berkshire, it isn't going to move the needle, but it is an artfully structured deal," Cathy Seifert, an analyst at S&P Capital IQ said in a phone interview from New York. "It's also win-win for both companies as it appears to be a tax-effective sale as well for P&G, and Buffett gets Duracell with a nice capital infusion."