Cleveland—Berkshire Hathaway (NYSE: BRK.A, BRK.B) and The Lubrizol Corp. (NYSE: LZ) today announced a definitive agreement for Berkshire Hathaway to acquire 100% of outstanding Lubrizol shares for $135 per share in an all-cash transaction. The transaction, which was unanimously approved by the board of directors of each company, is valued at approximately $9.7 billion, including approximately $0.7 billion in net debt, making it one of the largest acquisitions in Berkshire Hathaway history. This price represents a 28 percent premium over Lubrizol’s closing price on Friday, March 11, 2011, and is also 18 percent higher than Lubrizol’s all-time high share closing price.
“Lubrizol is exactly the sort of company with which we love to partner – the global leader in several market applications run by a talented CEO, James Hambrick,” said Warren Buffett, Berkshire Hathaway chief executive officer. “Our only instruction to James – just keep doing for us what you have done so successfully for your shareholders.”
James Hambrick, Lubrizol chairman, president and chief executive officer, said, “This transaction provides compelling value to our shareholders and is a clear endorsement of the growth and diversification success Lubrizol has achieved. We are very excited to have the opportunity to become part of the Berkshire Hathaway family. We believe its philosophy of supporting long-term global investments in technology, assets and employees will enhance execution of our growth strategies. Such a long-term commitment is more important than ever in today’s global economy to deliver true market-leading products and services for our customers.”
The transaction is subject to the approval of Lubrizol’s shareholders and the satisfaction of customary closing conditions, including the expiration of waiting periods and the receipt of approvals under the Hart-Scott-Rodino Antitrust Improvements Act and applicable non-U.S. merger control regulations. Berkshire Hathaway and Lubrizol expect the transaction to be completed during the third quarter of 2011.
After the close of the transaction, Lubrizol will operate as a subsidiary of Berkshire Hathaway and will continue to provide innovative technology, outstanding service and superior global supply chain support to its customers. Lubrizol will remain located at its Wickliffe, Ohio, headquarters and will continue to be led by its current management team.
Citi and Evercore Partners are acting as financial advisors to Lubrizol, and Lubrizol’s legal counsel is Jones Day. Berkshire Hathaway’s transaction counsel is Munger, Tolles & Olson LLP.