Warren Buffett's Firm to Buy Majority of Pilot Flying J Truck Stops - NECN
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Warren Buffett's Firm to Buy Majority of Pilot Flying J Truck Stops

Financial terms weren't disclosed, so it wasn't immediately clear how much of Berkshire's roughly $100 billion in cash will be used

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    In this June 14, 2016, file photo, Warren Buffett participates in a discussion during the White House Summit on the United State Of Women in Washington, D.C.

    Warren Buffett's company is acquiring a major stake in Pilot Flying J truck stops and it will become a majority owner within about five years.

    The ubiquitous truck stops, 750 of them in 44 states and Canada, make up the 15th largest private company in the U.S., according to Forbes, with revenue of almost $20 billion per year.

    Berkshire Hathaway and Pilot Travel Centers announced the deal Tuesday morning. Initially, Berkshire will buy 38.6 percent of the company that runs 750 truck stops across 44 states and Canada, but in 2023 that will increase to 80 percent.

    Financial terms weren't disclosed, so it wasn't immediately clear how much of Berkshire's roughly $100 billion in cash will be used.

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    Pilot Flying J, which is run by Cleveland Browns owner Jimmy Haslam, has been under scrutiny in recent years because of a diesel fuel rebate scam that led to criminal charges against several executives.

    The Knoxville, Tennessee, company paid an $85 million settlement with some of the defrauded customers as well as a $92 million penalty to the government.

    Haslam said Berkshire is a good fit for his family business because of its reputation as a long-term owner that largely lets companies run themselves. The deal will also provide financial flexibility that will let the Haslam family reduce its stake and another minority owner will sell by 2023.

    "Given the impeccable reputation of Warren Buffett's Berkshire Hathaway, and our shared vision and values, we decided this was an ideal opportunity," Haslam said.

    Berkshire is an eclectic conglomerate that owns more than 90 businesses, including Geico insurance, BNSF railroad, and several utilities and manufacturers. Buffett said Pilot Flying J will give Berkshire another way to profit when the U.S. economy grows.

    "Jimmy Haslam and his team have created an industry leader and a key enabler of the nation's economy," Buffett said. "The company has a smart growth strategy in place and we look forward to a partnership that supports the trucking industry for years to come."

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    Besides owning companies, Omaha, Nebraska-based Berkshire holds major investments in Wells Fargo, Bank of America, Apple and other well-known companies.