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new purchase from Philips 66


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Guest wellmont

there may be tax implications to this transaction. see "cash rich split off". p66 probably wanted the stock back as tax efficient way to return capital to shareholders. This deal was probably mostly done by tw. It may also be tax efficient for berkshire to do it this way.

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If this is the work of Berkshire's "next generation", what other operating businesses could Berkshire receive in exchange for stock? If Ted Weschler adopts the Liberty Media mindset (which he has owned and followed for a long time), this could get really interesting.


Some quick comments from Seeking Alpha:

Phillips 66 purchase a "great transaction" for Berkshire, but what about PSX?


For Berkshire Hathaway (BRK.A, BRK.B), the purchase of Phillips 66's (PSX +2.9%) specialty products unit has a lot to do with the tax treatment; the financial terms of the deal look like the cash-rich spinoffs used by Liberty Media when it acquired interests in businesses such as the Atlanta Braves and DirecTV.


The cash-rich split is a way for a holder of appreciated stock - PSX has gained 45% YTD - to dispose of it in a very tax efficient way, tax expert Robert Willens says, calling the acquisition a "great transaction" for Berkshire.


But Barron's Ben Levisohn wonders what the purchase might say about PSX: BRK chose to pay with ~19M PSX shares it already owns and not with cash - is it a sign Warren Buffett thinks PSX has run too far?

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