Abel goes his own way with new Berkshire investments, including billions

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Warren Buffett tells CNBC’s Becky Quick new Berkshire Hathaway CEO Greg Abel has “launched” with his first major deal, the $6.8 billion acquisition of Taylor Morrison Home, a residential homebuilder and developer with operations in 12 states.

On Monday’s “Squawk Box,” Becky quoted Buffett from a phone conversation the day before when the deal was announced:

“Greg did this faster than I could have done it, smoother than I could have done it, and I never talked to the CEO.

“He has launched.”

Becky noted that when Buffett wanted to do a deal, he would move quickly, and “this is basically what Greg has picked up and done, too.”

She reports Abel went to Arizona and spent around five hours with Taylor Morrison CEO Sheryl Palmer, but when he came back, he did not think he had a deal.

Then, a few days later, Palmer called to say the price was fair and her board was ready to proceed.

Becky says Abel spoke with Buffett and Berkshire lead director Sue Decker but didn’t tell the rest of the board until after the deal had been completed.

“That’s kind of the Berkshire way, to try and move quickly on these things,” she added.

Appearing on Monday’s “Squawk on the Street” later that morning, Palmer said joining Berkshire is a “once in a lifetime opportunity for the company, for the brand, and for team members across the country.” (The entire interview is available to CNBC Pro subscribers.)

She started speaking with Abel “probably just a number of weeks ago,” and his “pitch” was that Berkshire “has this wonderful collection of on-site builders, and they build generally around the first-time buyer … and if you think about the Berkshire eco-system, and what they’ve build for decades, I think what Greg saw was the opportunity, on a national scale, to build a platform.”

Berkshire housing and home improvement subsidiaries include Clayton Homes, Shaw Industries, Johns Manville, and Benjamin Moore. 

In a joint news release on the deal, Abel echoed Palmer, saying, “Over time, we expect to unify our site-built homebuilding operations into a combined platform enabling us to deliver the dream of homeownership to more Americans.”

Christopher Davis at Hudson Value Partners points out to Bloomberg the goal of unifying operations is a “notable departure” from Berkshire’s long-standing practice of letting subsidiaries run independently, but he thinks investors “will welcome that evolution in approach.”

CFRA Research analyst Cathy Seifert tells the AP, “Given Greg’s strength as an operator it will be…