NEW YORK — Berkshire Hathaway Inc. has inked a definitive agreement to buy Russell Corp. for $600 million.
Russell said in a statement that the deal, subject to stockholder and regulatory approvals, is expected to close in the third quarter of 2006. Under the terms of the deal, shareholders will receive $18 per share in cash. Russell’s shares closed Monday at $13.30, down 25 cents, in Big Board trading.
Jack Ward, Russell’s chairman and chief executive officer, said in a statement Monday, “Russell will be better positioned against our worldwide competitors in all three segments of our business and that includes apparel, sports equipment and athletic shoes. We also owe our gratitude to the thousands of people who have played roles in the development of this organization from a small Alabama apparel operation founded in 1902 to a major player in the global sporting goods marketplace of today.”
Warren Buffett’s Berkshire is no stranger to the apparel business.
In January 2002, Berkshire received Delaware bankruptcy court approval of its $835 million bid to buy then-bankrupt Fruit of the Loom. In September of the same year, Berkshire followed with the acquisition of Garan Inc., a manufacturer of sportswear for men, women and children. Berkshire subsequently offered $579 million in a cash bid to buy Burlington Industries when it was mired in bankruptcy proceedings, but pulled the offer in March 2003 after the bankruptcy court shot down Berkshire’s request to be paid a $14 million breakup fee. Burlington was subsequently bought by a consortium led by Wilbur L. Ross Jr., head of W.L. Ross & Co. and of then-bankrupt Burlington’s unsecured creditors’ committee.
Other Berkshire holdings include Ben Bridge Jeweler, Benjamin Moore & Co., Borsheim’s Fine Jewelry, Helzberg Diamonds, H.H. Brown Shoe Group, The Pampered Chef and See’s Candies.
Separately, Russell announced on Monday that its board has approved a regular quarterly dividend of 4 cents a share, payable on May 24, to shareholders of record as of May 10. The approval represents the 172nd consecutive quarterly dividend paid by the company, Russell said in a statement.