NEW YORK (TheStreet) --Warren Buffett is making a big move into the aerospace market, betting on the boom in the airline business.
The billionaire investor's Berkshire Hathaway (BRK.A - Get Report) is buying aircraft equipment maker Precision Castparts (PCP) for about $32 billion in cash, marking the conglomerate's biggest deal yet.
Berkshire, which is already the company's largest stockholder with a 3% stake, will pay $235 a share in cash for Precision Castparts' remaining shares. The offer represents a 21% premium over Precision Castparts' Friday closing price. Including debt, the takeover deal is valued at $37.2 billion.
As part of the agreement, Precision Castparts will become a unit of Berkshire while keeping its name and headquarters in Portland, Ore.
The two companies expect the deal to close in the first quarter of 2016, pending both shareholder and regulatory approval.
In a TV interview with CNBC, Buffett said the transaction will likely mean that Berkshire Hathaway will not make any other big acquisitions over the next 12 months. He said he plans to borrow about $10 billion to help fund the deal.
Precision Castparts makes parts for aircraft, power, and industrial companies with some high-profile customers including General Electric (GE - Get Report), Boeing (BA - Get Report) and Airbus (EADSY). The company makes parts such as fasteners and turbine blades for aircraft makers, as well as pipes and other equipment for power stations and the oil-and-gas industry.
The aerospace operations made up three-quarters of Precision's sales last year. Shares of Precision Castparts are soaring nearly 20% Monday after news of the deal. The stock has fallen more than 4% so far this year. Class A shares of Berkshire Hathaway are trading lower on Monday, but have risen more than 8% over the past year.