Warren Buffett's Berkshire Hathaway Inc. on Tuesday said it agreed to buy a minority stake in the operator of Pilot and Flying J travel centers and become the private firm's majority owner in 2023.
Berkshire didn't disclose how much it is paying for its initial 38.6% stake in Pilot Travel Centers LLC, which operates 750 travel centers along U.S. and Canadian roadways and generates more than $20 billion in annual revenue.
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Berkshire and Pilot said the Haslam family will continue to hold a 50.1% stake in Pilot, and Jimmy Halsam will remain chief executive. FJ Management Inc., owned by the Maggelet family, will hold an 11.3% stake in Pilot, the companies said.
In 2023, Berkshire Hathaway is expected to buy an additional 41.4% stake in Pilot and become the majority shareholder. The Haslam family will remain involved with a 20% stake, the companies said.
"Pilot Flying J is built on a longstanding tradition of excellence and an unrivaled commitment to serving North America's drivers," said Mr. Buffett. "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."
The investment is Berkshire's latest bet on transportation. In addition to running a railroad, Mr. Buffett's Nebraska conglomerate owns a 15.8% stake in refiner and oil- and gas-pipeline operator Phillips 66. It also is heavily invested in industrial manufacturers and consumer brands that rely on transportation networks to deliver their products, including Kraft Heinz Co. and Fruit of the Loom.
Pilot Flying J was shaken by a scandal beginning in 2013 when Pilot staff members were accused of defrauding trucking-company customers that bought diesel at its truck stops by shorting rebate money Pilot owed them. Pilot later accepted responsibility and settled with the federal government for $92 million.
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(END) Dow Jones Newswires
October 03, 2017 09:57 ET (13:57 GMT)