Buffett strikes deal to buy $1.4B Phillips 66 unit
Nati Harnik / AP
Fruit of the Loom
Warren Buffett plays the ukelele at the Fruit of the Loom stand at the Qwest Center in Omaha, Neb., while touring exhibits prior to the annual Berkshire Hathaway shareholders meeting in April 2005.
Dave Weaver / AP
Warren Buffett eats an ice cream bar made by Dairy Queen prior to the annual shareholders meeting in Omaha, Neb., Saturday, May 5, 2012.
Nati Harnik / AP
Jerry Baker / Houston Chronicle
Judith Andersen, of Conroe, stocks the shelves at the See's Candies shop at H-E-B Woodlands Market.
Kevin Lorenzi / Bloomberg
H.J. Heinz Co.
Bottles of H.J. Heinz Co. apple cider vinegar are displayed on a shelf at a Pittsburgh grocery store. Berkshire Hathaway Inc. partnered with Jorge Paulo Lemann’s 3G Capital to buy H.J. Heinz Co. for about $23 billion in early 2013, ending the independence of an iconic ketchup maker that traces its roots to the 1860s.
Gary Payne / AP Photo/Denton Record-Chronicle
Acme Brick Co.
Acme Brick employees Richard Mecca (left) and Harland Dixson measure a large brick made for the company's 116th anniversary in 2007 in Denton, Texas.
Nati Harnik / AP
Borsheims Fine Jewelry
Warren Buffett uses a super large paddle to play table tennis against junior champion Ariel Hsing, outside a Berkshire Hathaway-owned Borsheim's jewelry store in Omaha, Neb. in 2012.
Sharon Cantillon / AP Photo/The Buffalo News
Geico in Amherst, N.Y. celebrated its 2,500th employee in June 2013. Warren Buffett, CEO of Berkshire Hathaway which owns Geico, came to mark the milestone and answer questions from the media.
Victor J. Blue / Bloomberg
The engine compartment of a BYD Co. Ltd. e6 all-electric vehicle is shown in New York in December 2012. BYD is a Chinese automaker partly owned by Berkshire Hathaway.
The Pampered Chef
The Pampered Chef has a Microwave Egg Cooker that makes scrambled, poached and fried eggs in the microwave.
Gary Fountain / For the Chronicle
Curtis Bynum, a Gulfstream IV pilot, shows off a NetJets plane at Hobby Airport.
HOUSTON – Warren Buffett is betting on energy transportation technology.
The billionaire investor’s Berkshire Hathaway made a deal on Monday for Phillips 66’s pipeline flow improver business, which manufactures a chemical agent that breaks up debris and moves oil and gas through pipelines.
Buffett agreed to exchange 19 million shares his company owns in Phillips 66 — worth $1.4 billion at the close of trading Monday — for all of the Houston refiner’s stock in its specialty products unit, according to regulatory filings.
Buffett said in a statement the business “fit well within Berkshire Hathaway,” and that it would be folded into his Ohio chemicals maker Lubrizol Corp.
Berkshire Hathaway approached the Houston refiner and “made a great offer” for a non-core business the company had not put on the sales block, said Phillips 66 spokesman Dean Acosta.
The billionaire’s purchase could help the Phillips 66 focus on growing its midstream and chemicals businesses, Acosta said. The company has plans to shift its focus away from refining and spend $2.7 billion next year to expand those businesses, up 40 percent from its 2013 budget.
The flow improver business could have $450 million in cash and other assets on its books by the time the deal closes, the company said.
Phillips Specialty Products Inc. has a manufacturing plant and 58 employees in Bryan, Texas, as well as 50 sales and marketing employees in Houston, Acosta said.
Regulatory filings show that Buffett’s company owns 27 million shares in Phillips 66.
The deal is expected to close in the first half of next year. Phillips 66 shares edged up 9 cents to $74.72 in after-hours trading Monday.