Warren Buffett buys into Pilot Flying J
OMAHA, Neb. (AP) — Warren Buffett’s company is acquiring a major stake in Pilot Flying J truck stops and it will take over a majority stake within about five years from the family of Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam.
The ubiquitous truck stops, 750 of them in 44 states and Canada, make up the 15th largest private company in the U.S., according to Forbes, with 27,000 employees and revenue of more than $20 billion per year.
Berkshire Hathaway and Pilot Travel Centers announced the deal Tuesday morning. Initially, Berkshire will buy 38.6 percent of the company, but in 2023 that will increase to 80 percent.
Financial terms weren’t disclosed, so it wasn’t immediately clear how much of Berkshire’s roughly $100 billion in cash will be used.
The announcement comes as Bill Haslam is deciding whether to make a bid to succeed U.S. Sen. Bob Corker, a fellow Republican and close family friend who made the surprise announcement last week that he won’t seek another term in Congress.
Haslam’s refusal to divulge his earnings from his Pilot stake was a major issue in his first run for governor in 2010, and the company’s legal problems have quickly become fodder for critics from either side of the political spectrum hoping he won’t join the Senate race.
Pilot Flying J, which is run by Jimmy Haslam, has been under scrutiny in recent years because of a diesel fuel rebate scam that led to criminal charges against several members of the company’s sales team. Fourteen have pleaded guilty, while another four — including the company’s former president — are scheduled to go on trial on Oct. 31.
The company paid an $85 million settlement with most of the defrauded customers as well as a $92 million penalty to the government.
The scheme became public after federal agents raided the company’s Knoxville, Tenn., headquarters in 2013. An FBI affidavit unsealed after the search contained transcripts of secretly-recorded conversations among the sales team deriding trucking clients as unsophisticated, lazy and undeserving of the rebates they wrongly thought they were receiving.
Company founder Jim Haslam, a former University of Tennessee football player and the father of Jimmy and Bill Haslam, in 1958 bought his first gas station in Gate city, Virginia, and ultimately grew the company into country’s largest diesel retailer.
Jimmy Haslam said Berkshire is a good fit for his family business, which the Haslam family will continue managing after the deal.