Berkshire's Abel Completes First Acquisition, Expanding into Residential Construction
Alina Collins
Berkshire Hathaway paid $8.5 billion in cash for homebuilder Taylor Morrison — Greg Abel's first major acquisition as CEO, and the opening move in deploying Berkshire's $380 billion cash pile.
What did this deal actually buy?
Taylor Morrison is one of the largest land developers and homebuilders in the U.S., with roughly $8 billion in revenue and about $1 billion in pre-tax profit last year.
The $8.5 billion price tag works out to roughly 8.5× pre-tax earnings. This means → Berkshire bought a steady-margin, predictable-cash-flow business, not a high-growth bet.
Post-close, Taylor Morrison's brands — including Esplanade, Yardly, and Taylor Morrison Home Funding — merge with Clayton Properties Group's 15 regional homebuilders under Berkshire, forming a unified site-built housing platform.
Why did Abel pick homebuilding as his first move?
Abel's stated narrative centers on housing affordability — consolidating site-built operations into a single platform to "help more Americans achieve the dream of homeownership."
In plain terms = U.S. housing has a long-term supply deficit. Demand is structural, policy tailwinds are real. As a first deal, the risk profile is about as controlled as it gets.
Taylor Morrison CEO Sheryl Palmer called the combined operation's reach "transformative" — the core logic is scale driving costs down.
What does Buffett think of his successor?
Buffett told CNBC: "Greg got this done faster and smoother than I would have. I didn't even talk to that CEO. He's off and running."
This means → Buffett publicly endorsed Abel's independent authority. "I didn't even get involved" is, in Buffett's vocabulary, the highest compliment.
Buffett remains chairman and both say he stays engaged on major decisions — but the signal is clear: execution authority has been handed over.
What else is Abel doing?
Public equities: Berkshire built an Alphabet position from zero to roughly $28 billion (including ~$10 billion via a June directed placement), making it a top-five holding.
M&A pipeline: Last October Berkshire signed a deal to acquire OxyChem — Occidental Petroleum's chemicals arm — for close to $10 billion.
Team-building: SEC filings show that Berkshire's first-ever General Counsel Michael O'Sullivan, incoming CFO Charles Chang, and current CFO Marc Hamburg served as interim directors of the Taylor Morrison acquisition vehicle. This reflects Abel actively integrating his core team into the deal-execution process.
$380 billion in cash — is he spending fast enough?
As of March 31, Berkshire's cash reserves stood at $380 billion — doubled in two years, exceeding the market caps of GE, Coca-Cola, and Procter & Gamble.
Taylor Morrison at $8.5B + OxyChem at ~$10B + Alphabet at ~$28B totals roughly $46.5 billion. Put simply = all these moves combined account for only about 12% of the cash pile.
This means → the market's real test is not any single deal but whether Abel can sustain this pace of capital deployment — the speed of spending is the true scorecard for the successor.
Content is for reference only, not financial advice.