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By Jason Stipp and Jeremy Glaser | 11-13-2014 01:00 PM

Friday Five: Buffett's Batteries, Net Neutrality Realities

A closer look at Berkshire's deal for Duracell, what net neutrality may mean for Internet service providers, and more.

Jason Stipp: I'm Jason Stipp for Morningstar and welcome to The Friday Five, Morningstar's take on five stories from the market this week.

Joining me with The Friday Five is Morningstar markets editor Jeremy Glaser.

Jeremy, thanks for joining me.

Jeremy Glaser: You're welcome, Jason.

Stipp: Up first this week, Berkshire Hathaway announced that it is buying P&G's Duracell business for $4.7 billion. What's your take on the deal?

Glaser: This is a bit of an unusual deal. For various tax reasons, it's actually going to be a swap where Warren Buffett's Berkshire Hathaway, which owns quite a few Procter & Gamble shares, is going to send those shares over to Procter & Gamble in exchange for the battery business. Procter & Gamble is also going to kick in $1.8 billion to help recapitalize the battery business.

This makes sense from P&G's standpoint. They have been trying to sell Duracell for quite some time. They want to focus on fewer brands that are going to be growing faster, and Duracell definitely is not a fast-growing business anymore. With the rise of a lot of electronics that don't take replaceable batteries, it's a business--although it has decent sales now--that probably isn't going to see a lot of growth.

Warren Buffett is often attracted to well-known consumer brands, so you could see why he might like to do it. But Gregg Warren, our Berkshire Hathaway analyst, thinks that one of the other reasons could be that this is a tax-efficient way to exit his P&G stake. He may be trying to simplify his portfolio, get rid of some of these legacy holdings to make it easier for his successors to handle that investment portfolio. This could be a good way to do that, and that could be a driver of this deal as well.

Stipp: Cable stocks this week fell after President Obama came out in support of net neutrality. How should investors think about this?

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