Morningstar

Berkshire Hathaway: Abel Embarks on First Acquisition as CEO with Purchase of Taylor Morrison Home

We suspect this will prompt Berkshire to take a harder look at its stock holdings in Lennar and NVR.

The Berkshire Hathaway Inc. is displayed on a smartphone screen.
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Securities in This Article
Berkshire Hathaway Inc Class B
(BRK.B)

Key Morningstar Metrics for Berkshire Hathaway

  • Fair Value Estimate
    : $510.00
  • Morningstar Rating
    : ★★★★
  • Morningstar Economic Moat Rating
    : Narrow
  • Morningstar Uncertainty Rating
    : Low

Berkshire Hathaway BRK.B announced that it has offered to acquire Taylor Morrison Home Corporation in an all-cash deal that would value the homebuilder at $8.5 billion (including the assumption of debt).

Why it matters: This marks CEO Greg Abel’s first true acquisition as Berkshire’s chief executive. He previously worked on the OxyChem deal, an all-cash transaction worth around $9.5 billion that did not include the assumption of any debt.

  • Berkshire has offered to pay $72.50 per share for the outstanding shares of Taylor Morrison, which would be reflective of a total equity value of close to $6.8 billion (based on 93.4 million shares outstanding on April 22, 2026) and total enterprise value of around $8.5 billion (inclusive of $1.5 billion of principal debt outstanding at the end of the first quarter of 2026). The acquisition price represents a 24% premium to Taylor Morrison’s latest closing price of $58.50 per share on May 29, 2026. The transaction is expected to close in the back half of the year.
  • We also suspect that this will prompt Berkshire to take a harder look at its stock holdings in Lennar (worth $928 million) and NVR ($68 million), the sale of which could cover around three-quarters of the premium paid for Taylor Morrison. We’d note that Berkshire sold its Union Pacific stock holdings in late 2009 to clear the way for its $26.4 billion acquisition of rival railroad BNSF.

The bottom line: We are leaving our $765,000 ($510) per Class A (B) share fair value estimate for Berkshire’s common stock in place for the time being. The deal is relatively small, with Taylor Morrison’s expected revenue of $6.5 billion in 2026 (and expected operating margin of 10.2%) and $7.1 billion (10.9% operating margin) in 2027 only slightly higher than our projections for acquired assets in Berkshire’s manufacturing, service, and retailing segment.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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