By Andrew Bary

Berkshire Hathaway agreed to buy Taylor Morrison Home, a leading homebuilder, for $8.5 billion in cash (including assumed debt) as Berkshire continues to expand in the home-building sector.

In a press release late Sunday afternoon, Berkshire said it would pay $72.50 a share for the Arizona-based company, a 24% premium to its closing price Friday of $58.50.

The deal signals a willingness by Berkshire's new CEO Greg Abel to make purchases using the company's nearly $400 billion in cash, and it also adheres to Berkshire's historic value orientation of price discipline in buying stocks or companies.

The transaction, while not large, likely will be well-received by Berkshire investors. Berkshire's Class A stock, which ended Friday at $710,900, is down 6% this year and is more than 15 percentage points behind the S&P 500 index.

Berkshire appears to be taking advantage of the weakness in home-building stocks to get a well-regarded Sunbelt company for a discounted price. The new-home market has been depressed by higher mortgage rates.

Berkshire is paying just over 1.1 times the company's book value and about nine times trailing earnings for Taylor Morrison, which services the entry-level market, move-up buyers, and resort communities. Its average selling price is around $600,000.

At Friday's close, the stock was near its 52-week low, and the purchase price of $72.50 matches Taylor Morrison's 52-week high reached last September.

Berkshire is active in home-building. It owns Clayton Homes, the leader in manufactured homes, as well as Benjamin Moore (paints) and Shaw (carpeting and flooring).

In a statement, Sheryl Palmer, Taylor Morrison's Chairman and Chief Executive Officer, said, "Joining Berkshire Hathaway is a once-in-a-lifetime opportunity to propel Taylor Morrison into its next, and most exciting, chapter, supported by Berkshire's unmatched capital strength and long-term investment philosophy."

"Berkshire is acquiring a best-in-class national homebuilder, led by an exceptional team and backed by a trusted reputation for customer experience," said Abel in the press release.

Barron's wrote earlier this year that a homebuilder would be a natural purchase for Berkshire but the company we identified, Lennar, wasn't the one Berkshire is buying.

It will be interesting to see shareholder reaction among Taylor Morrison holders given the modest valuation that Berkshire is paying for the company. Taylor Morrison has been an active buyer of its stock.

Berkshire is paying $6.8 billion for the home builder's equity plus assuming about $1.7 billion in debt.

Write to Andrew Bary at andrew.bary@barrons.com

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May 31, 2026 17:57 ET (21:57 GMT)

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