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March 14, 2011 2:06 PM

Jones Day Advises Lubrizol in $9 Billion Acquisition by Berkshire Hathaway

Posted by Tom Huddleston Jr.

Warren Buffett made good on a recent promise to seek out major acquisitions as Berkshire Hathaway, Inc., announced today it agreed to buy chemicals company The Lubrizol Corporation for $9 billion in cash.

Berkshire Hathaway turned to longtime outside counsel Munger, Tolles & Olson on the deal. Jones Day is advising Lubrizol, a Wickliffe, Ohio-based company that reported more than $5 billion in sales last year making products such as gas and lubricant additives.

In a letter to shareholders last month, Buffett said his Omaha-based company was prepared to put its almost $38 billion in cash to use. "Our elephant gun has been reloaded, and my trigger finger is itchy," he wrote.

Berkshire Hathaway agreed to pay $135 a share for Lubrizol, a 28 percent premium over the company's March 11 closing price. The transaction, expected to close in the third quarter, also includes the assumption of $700,000 in debt. The deal would be one of the largest ever for Buffett's company and the biggest since the 2009 $34 billion cash and stock deal for railroad operator Burlington Northern Santa Fe.

Munger, Tolles advised Berkshire Hathaway on the Burlington Northern deal, and has been Buffett's go-to firm since founding partner Charles Munger joined the company in 1965, as we previously reported. (Munger, who is now vice-chairman of Berkshire Hathaway, is making a $20 million donation to the law school at his alma mater, the University of Michigan, the school announced today in a release.) 

Los Angeles corporate partner Robert Denham led the firm's deal team on the transaction. Corporate partner Mary Ann Todd and tax partner Stephen Rose also advised.

Meanwhile, Jones Day's team was led by Cleveland M&A partners Lyle Ganske and James Dougherty. Other lawyers advising from the firm include employee benefits partner Manan "Mike" Shah and antitrust partner Bevin Newman. Lubrizol's general counsel, Suzanne Day, served as the company's primary in-house counsel on the deal.

Jones Day advised Lubrizol on various matters in the past, including the 2006 sale of its pharmaceutical subsidiary Noveon Pharma GmbH & Co. KG to Auctus Management GmbH.

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