Businessman Warren Buffett just invested a large sum of his money in the aerospace industry.
Buffett’s Berkshire Hathaway Inc. just made a $37.2 billion deal to purchase Precision Castparts Corp., which makes parts for aircrafts. This is the largest investment the tycoon has ever made.
The Portland, Oregon-based company makes parts such as turbine blades for aircrafts, but also creates pipes for the oil and gas industry. Last year, 75 percent of the company’s sales were in the aircraft sector, the other 25 percent was in energy and power. Buffett told CNBC News he had his eye on the company for a while.
“I’ve admired PCC’s operation for a long time,” Buffett said to the news source. “For good reasons, it is the supplier of choice for the world’s aerospace industry, one of the largest sources of American exports.”
According to the Wall Street Journal, Buffett’s move suggests that airlines may boost the aerospace manufacturing industry. Currently, the industry may be on the rise thanks to airplane makers building thousands of new jets. A rise in the market may help open up avenues for new jobs.
Buffett’s confidence in the industry has already helped the aerospace stock market, according to ETF Trends. On Monday, the iShares U.S. Aerospace and Defense ETF rose by 2.7 percent, PowerShares Aerospace & Defense Portfolio and SPDR S&P Aerospace & Defense ETF both increased by 2.6 percent.