Buffett’s Berkshire Hathaway to Acquire Johns Manville

Johns Manville Corp., the building products maker that has been searching for a buyer for nearly two years, said Wednesday it would be acquired by Berkshire Hathaway Inc. for $1.92 billion.

The deal comes less than two weeks after Johns Manville canceled a $2.3-billion takeover by buyout firm Hicks, Muse, Tate & Furst Inc. and Bear Stearns Cos.’ merchant banking unit. The companies mutually agreed to abandon that deal, which valued Johns Manville at $15.63 a share, because of weak financing markets and a softening economic outlook.

Berkshire Hathaway is the holding company led by billionaire investor Warren Buffett. Most of Berkshire Hathaway’s revenue is generated by insurance holdings Geico Corp., General Re Corp. and National Indemnity Co., but it also owns a wide range of other businesses, such as See’s Candies, Dexter Shoe Co. and Dairy Queen.

Berkshire Hathaway, which typically invests in companies it considers to be undervalued with good prospects, recently agreed to buy carpet company Shaw Industries Inc. and paint company Benjamin Moore.

“Johns Manville fits well in the Berkshire family of successful enterprises with global brand recognition,” Buffett said.

The offer of $13 a share represented a 21% premium to the closing stock price for Johns Manville on Tuesday, but falls short of the company’s 52-week high of $14. Shares of Johns Manville jumped $2.13, or 20%, to close at $12.88 on the New York Stock Exchange.

Johns Manville would become a wholly owned subsidiary of Berkshire Hathaway and would remain based in Denver.

“The transaction will allow the company to grow our business and to continue meeting our customers’ needs under an ideal ownership and capital structure,” Johns Manville Chairman and Chief Executive Jerry Henry said.

Johns Manville was nearly devastated by asbestos litigation in the 1980s and filed for bankruptcy in 1982 as it faced thousands of health-related lawsuits. While in bankruptcy, the company halted asbestos production and created a trust fund to handle all asbestos-related claims.

The trust, which owns 76% of the company’s outstanding shares, has agreed to tender its stock to Berkshire Hathaway, Johns Manville said. The tender will start no later than Jan. 3.

The 142-year-old company put itself up for sale in January 1999, but took itself off the auction block a few months later after it said it had not received any acceptable offers.

In June, Johns Manville struck the deal with Dallas-based Hicks Muse and Bear Stearns. The deal was canceled Dec. 8.