Geoff Gannon April 18, 2006

News Item: Berkshire Hathaway Buys Russell Corporation

Warren Buffett’s Berkshire Hathaway (BRK.B) will acquire publicly held Russell Corporation (RML) for $18 a share. Berkshire will also assume about $400 million in debt.

The deal values Russell at roughly $1 billion ($600 million cash + $400 million debt). In 2005, Russell’s EBIT was $84.37 million. Earnings before interest and taxes had been higher in five of the last ten years.

Russell has signed a definitive merger agreement. The deal is expected to close by October 1st. RML opened above $18 today.

For more information see Value Discipline’s most recent post: “Berkshire Buys Russell – The Advantage of Long Term Horizon