To enhance shareholders’ value, Phillips 66 PSX will repurchase its common stock from a wholly-owned subsidiary of Berkshire Hathaway Inc. BRK.A.
The company will buy back 35 million shares for $93.725 per share. The repurchase is valued at $3.3 billion and is expected to close on Feb 14.
On completion, Phillips 66 will have outstanding shares of 466.5 million, of which, Berkshire Hathaway will have an equity ownership interest in 45.7 million shares.
Warren E. Buffett, Berkshire Hathaway Chairman and CEO, cited the reason for sale as none other than its desire to get rid of the regulatory requirements that come with ownership levels above 10%. Buffett is optimistic about the company’s diverse downstream portfolio and strong management.
Per Phillips 66, the transaction is beneficial to all shareholders. The repurchase is immediately accretive to earnings and is a positive for valuation. The company is committed to grow Midstream and Chemicals businesses and boost returns from Refining and Marketing.
The company is a leading player in each of operations like refining, chemicals and midstream in terms of size, efficiency and strengths. Phillips 66 is on track to enhance its potential in every business segment by streamlining its portfolio of assets and investing in growth.
The company has an impressive capital deployment record. The company regularly rewards shareholders with increased dividends and share repurchases. This indicates its financial strength and steady returns from operating units.
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