Berkshire Hathaway has acquired Taylor Morrison Home Corp., the sixth-largest homebuilder in the U.S., for $8.5 billion in cash, marking the conglomerate’s first major purchase under new CEO Gregory Abel. The deal, announced this week, values Taylor Morrison at $72.50 per share and comes as Berkshire’s cash reserves hit a record $400 billion, according to fortune.com.
The acquisition was completed smoothly and quickly under Abel, who took over as CEO on January 1. Warren Buffett, Berkshire’s chairman, praised Abel’s handling of the deal, saying he acted faster and more efficiently than Buffett himself could have. Buffett noted he did not speak directly with the CEO during the process. The purchase price represents about 0.9 times Taylor Morrison’s tangible book value, indicating Berkshire paid less than the homebuilder’s hard asset worth, per Citizens analyst James McCandless.
This move signals a shift for Berkshire Hathaway, which had been cautious about large acquisitions despite its substantial cash pile. The deal reflects Buffett’s long-standing acquisition strategy of buying undervalued assets, even as he steps back from day-to-day operations. Taylor Morrison’s addition expands Berkshire’s footprint in the housing market, a sector that has seen increased investor interest amid fluctuating real estate conditions. The deal aligns with Berkshire’s history of value-driven investments in tangible assets.
Taylor Morrison shareholders will receive $72.50 per share in cash, finalizing the $8.5 billion transaction. The acquisition was announced shortly after Berkshire’s annual shareholders meeting, where Abel presided as CEO for the first time. This deal is the largest Berkshire Hathaway acquisition since Abel assumed leadership earlier this year.