Warren Buffett snaps up Duracell for $4.7bn

The “genius investor” Warren Buffett is paying $4.7bn (£3bn) to buy the Duracell battery business from Procter and Gamble (P&G).

Famous for its drumming bunny advertisements, the brand joins Buffett’s stable of consumer interests, which include Heinz, bought by his Berkshire Hathaway group in a $28bn deal last year. He also owns Fruit of the Loom and has stakes in Tesco, IBM, Coca-Cola, and American Express.

The billionaire, known as the Sage of Omaha, said: “I have always been impressed by Duracell, as a consumer and as a long-term investor in P&G and Gillette. Duracell is a leading global brand with top quality products, and it will fit well within Berkshire Hathaway.”

Berkshire Hathway will turn over $4.7bn of Procter and Gamble shares it owns to P&G. But P&G is putting $1.7bn of cash into the Duracell business, meaning the acquisition will cost Buffett a net $3bn. The deal is expected to close in the second half of next year.

The Duracell sale forms part of P&G’s plans to slim down its consumer products portfolio, which also includes Gillette. Berkshire is P&G’s fifth-biggest shareholder with a stake of nearly 2%.

Buffett, one of the world’s richest people, recently admitted that he had made a “huge mistake” by investing in Tesco, which is mired in an accounting scandal and has seen its profits plunge. Berkshire was one of the supermarket chain’s largest shareholders until recently when it started selling down its stake. It recorded a $678m loss on its Tesco investment in the third quarter.