The new head of Berkshire has made his first big purchase. He invested in a troubled sector

Berkshire Hathaway has agreed to buy one of the largest American developers Taylor Morrison. For the new head of the investment company Greg Abel, who replaced the legendary Warren Buffett in early 2026, this is the first major deal. Abel is betting on a recovery in the sagging real estate sector, the Financial Times points out, noting that the deal may contain a signal: Buffett's successor has begun spending the unprecedented cachet accumulated by the "oracle of Omaha" due to a lack of investment opportunities in the final years of his leadership.

Berkshire said it will pay Taylor Morrison's owners $72.5 per share - 24% above the closing price on the last trading day of Ma. The developer was valued at about $8.5 billion including debt, and its share capital - in $6.8 billion. On the news of the deal, Taylor Morrison shares soared on the premarket of the New York Stock Exchange by more than 20% (over the past three months they - in the minus by more than 9%). At the same time, Berkshire securities remained almost unchanged in price.

The purchase of Taylor Morrison was the company's first major deal under the new CEO. It was Abel who initiated the acquisition after taking over from Buffett, writes the Financial Times (FT). In January 2026, Berkshire paid $9.5 billion for Occidental Petroleum's petrochemicals business, but the agreement was reached under Buffett.

The FT notes that the pace of Berkshire acquisitions has slowed in the final period of Buffett's leadership. A major purchase just six months after Abel took office reinforces expectations that the investment firm will begin to more actively use the nearly $400bn of accumulated liquidity for new acquisitions.

Bloomberg called the purchase of Taylor Morrison a "vote of confidence" in the U.S. housing market. The deal comes at a time when developer stocks are lagging the market and mortgage rates have risen to their highest since the summer of 2025, the agency points out.

At the May 2026 AGM, Abel said he had a short list of companies whose takeover - in whole or in part - he was interested in, but subject to a suitable price. "There will be imbalances in the markets that will allow us to act," he predicted(quoted in The Wall Street Journal).

"Over time, we expect to consolidate our development assets into a single platform," Abel said, commenting on the Taylor Morrison acquisition. Hudson Value Partners partner Christopher Davis called it a "marked departure" from Berkshire's traditional strategy and added: "Investors will welcome this evolution in approach," Bloomberg reports.

Berkshire has a long history of investing in the construction sector. The company back in 2003 bought the manufacturer of modular houses Clayton Homes, owns suppliers of building materials Acme Brick, Benjamin Moore and Johns Manville, as well as one of the largest U.S. residential real estate agencies. Berkshire's portfolio at the end of March this year also included stakes in real estate developers Lennar and NVR, Reuters writes.

Although investors are generally loyal to Abel as head of Berkshire, quotes of the investment company since the beginning of 2026 fell by almost 6%, while the U.S. stock market rose by almost 11% over the same period, states Bloomberg. At the same time, Wall Street consensus on Berkshire shares over the past three months has improved from neutral (Hold) to "above market" (Overweight, consistent with the recommendation to buy securities).

This article was AI-translated and verified by a human editor