Berkshire Hathaway Buying 38.6% Stake in Pilot Flying J -- Update
By Nicole Friedman
Warren Buffett's Berkshire Hathaway Inc. on Tuesday made a bet on American truckers with a deal to acquire nearly 40% of the operator of Pilot and Flying J travel centers.
The Knoxville, Tenn.-based family-owned Pilot Travel Centers LLC, better known as Pilot Flying J, has 750 locations in the U.S. and Canada where truckers and drivers refuel, eat and shop. The company said it generates more than $20 billion in annual revenue.
Berkshire didn't disclose how much it paid for its initial 38.6% equity stake in Pilot, one of the largest private companies in the U.S. The Haslam family will hold a 50.1% stake in the company after the deal closes, and FJ Management Inc., owned by the Maggelet family, will hold an 11.3% stake, according to a press release.
In 2023, Berkshire plans to buy an additional 41.4% stake, and the Haslam family will retain 20%.
The investment is Berkshire's latest bet on traditional forms of transportation and U.S. economic growth. Mr. Buffett already owns BNSF Railway, auto-dealership group Berkshire Hathaway Automotive, car insurer Geico and private-jet company NetJets.
"There will be more goods moving to more people as the years go by in the United States -- that I would bet a lot of money on," Mr. Buffett, Berkshire's chairman and chief executive, said in an interview.
The deal runs counter to the massive projected growth in electric vehicles and self-driving cars and trucks expected by some analysts. Belief in those businesses has helped Elon Musk's Tesla Inc., for example, post a more than 60% stock-price jump in the past year.
Jimmy Haslam, Pilot's chief executive, said in an interview that both trends still have a long way to go before becoming mainstream and disrupting the truck business.