Berkshire Hathaway To Acquire Flow Improver Business From Phillips 66

To acquire Phillips Specialty Products Inc., a flow improver business based in Houston.

Berkshire Hathaway Inc. (NYSE: BRK-A, BRK-B) is acquiring Phillips Specialty Products Inc. (PSPI), a flow improver business, from Phillips 66 (NYSE: PSX), the company announced Dec. 30.

In exchange for the share capital of the wholly owned subsidiary, Phillips 66 will receive shares of Phillips 66 common stock currently held by the Omah, Neb.-based Berkshire Hathaway. The specific number of shares will be determined by the share price at deal closing.

“I have long been impressed by the strength of the Phillips 66 business portfolio,” Warren E. Buffett, Berkshire Hathaway CEO, said in the release. “The flow improver business is a high-quality business with consistently strong financial performance, and it will fit well within Berkshire Hathaway. I plan to have James L. Hambrick, CEO of The Lubrizol Corporation, oversee its strategic direction.”

PSPI leads the science of drag reduction and specializes in developing polymers to maximize the flow potential of pipelines. This transaction is part of Houston-based Phillips 66’s ongoing portfolio management and supports the company’s growth strategy.

“Berkshire Hathaway made a strong offer for our high-performing flow improver business,” Greg Garland, chairman and CEO of Phillips 66, said in the release. “This transaction optimizes our portfolio and focuses growth on our midstream and chemicals businesses.”

Following regulatory review, the transaction is expected to close in the first half of 2014.