Berkshire Hathaway CEO Greg Abel meets with shareholders at the Berkshire Hathaway Annual General Meeting on May 1, 2026 in Omaha, Nebraska.
David A. Grogan | CNBC
Greg Abel’s first major acquisition Berkshire Hathaway CEO trades are very similar to the kinds of trades Warren Buffett would make himself.
Berkshire buys homebuilder for $6.8 billion taylor morrison home It appears to have given the conglomerate a bigger foothold in housing, expanded its existing business lines, and earned it a cheap valuation. Equally noteworthy is that Buffett had little involvement in the process.
“Greg did it faster than I could do it, smoother than I could do it, and I never talked to the CEO,” Buffett said. “He has left.”
Berkshire agreed to pay Taylor Morrison $72.50 per share in cash, valuing the homebuilder at about $6.8 billion, or $8.5 billion including debt. Citizens analysts said the valuation appears modest compared to recent transactions in the industry.
“Based on recently completed transaction multiples, the estimated 0.9x tangible book value Berkshire is paying appears low compared to recent transactions with public construction contractors,” Citizens analysts said.
They noted that the acquisition of Tri Point Homes earlier this year implied a multiple of approximately 1.2x future tangible book value, while MDC Holdings was acquired last year for approximately 1.3x tangible book value.
Berkshire Ecosystem
The deal also fits with another feature of Berkshire’s acquisition strategy: buying companies that are more valuable within a conglomerate than they would be on their own.
Housing has long been one of Berkshire’s core businesses. The conglomerate owns Clayton Homes, the nation’s largest manufacturer of manufactured and modular homes, and also owns a wide range of businesses related to home construction, including manufacturers of flooring, insulation, roofing, paint and brick. It also manages the Berkshire Hathaway HomeServices real estate brokerage network.
Abel said in a statement Monday that he plans to integrate Berkshire’s site-built homebuilding business into a unified platform over time.
Analysts at UBS said the combination of Taylor Morrison and Clayton’s field-built homebuilding businesses could create one of the top five U.S. homebuilders by volume. Clayton closed on more than 10,000 homes in 2024, while Taylor Morrison delivered nearly 13,000, according to UBS.
“Given that Clayton Homes is already the largest manufacturer of manufactured and modular homes in the United States, we believe Berkshire can leverage this transaction to bring additional off-site construction methods to TMHC,” UBS said in a note. “We expect consolidation among U.S. homebuilders to continue, which could be a meaningful catalyst for industry improvement, greater efficiency, and higher stock prices.”
The deal also represents a relatively small bet for a company with nearly $400 billion in cash. Berkshire ended the first quarter with a record cash pile of $397.4 billion, meaning acquisitions consumed less than 2% of its available liquidity.
Still, the deal ranks as Berkshire’s biggest acquisition in recent years. The conglomerate’s last big deal was the $9.7 billion acquisition of Oxychem. western oilchemical business, completed in January.
—CNBC’s Michael Bloom contributed reporting.
