Coverage: Buffett buys big stake in truck stop operator

Warren Buffett’s Berkshire Hathaway Inc. bought a major stake in Pilot Flying J, the largest U.S. truck stop operator, and said it will become the majority owner in six years.

Jonathan Stempel of Reuters had the news:

Pilot Flying J has more than 750 locations in 44 U.S. states and Canada selling gas, diesel fuel, and convenience goods, and offering trucks more than 70,000 parking spaces and 5,000 diesel lanes.

While terms for Tuesday’s transaction were not disclosed, Pilot Flying J is 15th-largest private company in the United States, with annual sales of $19.6 billion, Forbes magazine said. The family-run company employs more than 27,000 people.

Berkshire bought 38.6 percent of Pilot Flying J from several investors and plans to boost ownership to 80 percent in 2023.

The controlling Haslam family retained a 50.1-percent stake, and will own the remaining 20 percent once Buffett takes over.

Chase Purdy of Quartz writes that Buffett is betting against self-driving cars and trucks:

Still, Buffett’s faith in the future of a trucking system operated by humans could totally miss the mark. To be sure, the billionaire has admitted before to being very, very wrong in his thinking. In May, Buffett told shareholders of Berkshire Hathaway that he underestimated the potential of Jeff Bezos’ Amazon.

“I was too dumb to realize,” he said. “I did not think [Bezos] could success on the scale he has.”

To be sure, self-driving trucks are already in use in some capacities. At one of Singapore’s busiest ports, robot-run trucks are transporting cargo. In Australia, they are hauling iron ore. And in mid-2016, a fleet of driverless trucks navigated their way across the continent.

Ed Hammond and Noah Buhayar of Bloomberg News reported that Buffett has missed other deals this year:

The investment in one of the biggest private U.S. companies marks a return to large dealmaking for Buffett, who’s had a relatively quiet 2017 after walking away from a $143 billion attempt to acquire Anglo-Dutch consumer goods giant Unilever. His bid to purchase Oncor Electric Delivery Co. was bested by Sempra Energy in August, after activist investor Paul Singer bought up the target’s debt to block Buffett and back the rival suitor.

Haslam said in an interview he hit it off with Buffett after being introduced earlier this year by Chicago merchant banker Byron Trott, who suggested the Berkshire chairman buy a minority stake in the truck stop operator. Pilot Flying J generates annual revenue of more than $20 billion and was named the 15th largest private company in the U.S. by Forbes magazine.

“Jimmy Haslam and his team have created an industry leader and a key enabler of the nation’s economy,” Buffett, 87, said in the statement. “We look forward to a partnership that supports the trucking industry for years to come.”