Jonathan Stempel
NEW YORK (Reuters) – Berkshire Hathaway (NYSE:), the conglomerate led by billionaire Warren Buffett, paid $2.6 billion last month for 20% of the Pilot Travel Centers truck stop business it did not already own, after resolving a lawsuit over price.
The price means Berkshire paid about $13.6 billion for Pilot, which operates more than 725 locations in the U.S. and Canada and sold 13 billion gallons of fuel in 2022.
Berkshire disclosed the purchase price in its annual report on Saturday.
Pilot, sometimes known as Pilot Flying J, was founded in 1958 by Jim Haslam after he paid $6,000 for a gas station in Virginia. It was later managed by Jimmy Haslam, the billionaire owner of the Cleveland Browns football team.
Berkshire paid $2.76 billion in 2017 for a 38.6% stake in Pilot and $8.2 billion for another 41.4% in January 2023, then overhauled its management.
Pilot, based in Knoxville, Tennessee, added $603 million to Berkshire’s 2023 earnings.
Haslams had an annual 60-day window to sell the final 20% of Pilot at a price based on its profits.
In competing lawsuits in Delaware Chancery Court, each side accused the other of dishonestly manipulating Pilot’s books, with the Haslams arguing that Berkshire had undervalued its stake and Berkshire feared it might overpay.
Buffett didn’t mention Pilot in his annual letter to Berkshire shareholders, also released Saturday, but did offer an anecdote about the risk of disappointment in acquisitions.
He recalled how Hugh McCulloch, the first Comptroller of the United States, warned the nation’s banks in 1863 not to deal with “scoundrels,” even if they thought they could avoid fraud.
“Many bankers who thought they could ‘handle’ the bad guy problem learned the wisdom of Mr. McCulloch’s advice, and so did I,” Buffett said. “People are not easy to read. Sincerity and empathy are easy to fake. This is as true now as it was in 1863.”
Berkshire did not immediately respond to a request for comment Saturday.
Last May, Buffett said he wanted to buy all of Pilot in 2017, but the Haslams didn’t want to sell.