Berkshire Hathaway, the company controlled by billionaire investor Warren Buffett, announced Tuesday morning the company is purchasing Haslam-family owned Pilot Flying J, the privately owned national truck-stop chain that had $19 billion in revenue in 2016.
The announcement comes four days after Breitbart News reported that Haslam-owned Pilot Flying J employees are headed to trial next month on federal fraud charges, and two days after Breitbart News reported that conservative Republicans in Tennessee say that Pilot Flying J appears to benefit from a gas tax increase pushed through by Tennessee Gov. Bill Haslam (R).
“Berkshire Hathaway Inc. (NYSE: BRK.A; BRK.B) (‘Berkshire’) and Pilot Flying J jointly announced today that Berkshire has made a significant minority investment in Pilot Travel Centers LLC, d/b/a Pilot Flying J (‘the Company’). The Haslam family will continue to own a majority of Pilot Flying J and Jimmy Haslam will remain as chief executive officer. Pilot Flying J President Ken Parent and the Company’s management team will also remain in place. The Company will continue to be headquartered in Knoxville, TN,” the company said in a press release issued early on Tuesday:
Under the terms of the agreement, Berkshire will acquire a 38.6 percent equity stake in Pilot Flying J. The Haslam family will continue to hold a majority interest with 50.1 percent ownership in the Company and FJ Management, Inc., owned by the Maggelet family, will retain 11.3 percent ownership until 2023. In 2023, Berkshire will become the majority shareholder by acquiring an additional 41.4 percent equity stake and the Haslam family will retain 20 percent ownership in the Company and remain involved with Pilot Flying J.
“Pilot Flying J is built on a longstanding tradition of excellence and an unrivaled commitment to serving North America’s drivers,” said Warren Buffett, chairman, president and CEO of Berkshire Hathaway. “Jimmy Haslam and his team have created an industry leader and a key enabler of the nation’s economy. The Company has a smart growth strategy in place and we look forward to a partnership that supports the trucking industry for years to come.”
“Given the impeccable reputation of Warren Buffett’s Berkshire Hathaway, and our shared vision and values, we decided this was an ideal opportunity,” said Jimmy Haslam, CEO of Pilot Flying J. “As a family business that has evolved and prospered over the last six decades, we knew that any potential partner would need to share our commitment and have a proven track record as a long-term investor. We have that in Berkshire Hathaway – they believe in our strategy, support our team and are excited to see Pilot Flying J grow. We are honored and humbled to partner with them.”
The political implications of this purchase for Tennessee politics could be significant, particularly for the 2018 Senate race in the state.
Governor Bill Haslam, a Republican who called on President Trump to withdraw from the 2016 race in October 2016, first elected in 2010, is considering a run for the U.S. Senate seat being vacated by Senator Bob Corker. Pilot Flying J was founded by Gov. Haslam’s father, Jim Haslam and his brother, Jimmy Haslam, is company CEO and owner of the NFL’s Cleveland Browns.
Virtually all of Gov. Bill Haslam’s estimated $2.5 billion net worth is derived from his inherited ownership of Pilot Flying J.
Conservatives in the state are consolidating around Rep. Marsha Blackburn (R-TN-07), who many expect to announce her candidacy for the Republican nomination for the U.S. Senate soon, as the Washington Examiner reported on Tuesday:
Influential conservatives in Washington are coalescing behind Rep. Marsha Blackburn, as Republicans jockey to succeed Sen. Bob Corker in deep red Tennessee.
The Club for Growth spoke favorably of a possible Blackburn Senate candidacy on Friday. David Bossie, the close confidant of President Trump who runs Citizens United, indicated the same day that he would like to see Blackburn become the consensus conservative candidate in the August 2018 Republican primary.
“This deal will set the stage for plea bargains at Pilot Flying J, and is also intended to help Gov. Bill Haslam moving forward. If Bill Haslam thinks this clears the way for him to run for the Senate, he is mistaken. All it does is drag him down into the whole sordid illegal mess created by his family,” a long time Republican political operative familiar with Tennessee politics tells Breitbart News.
The trial of former Pilot Flying J President Mark Hazelwood, who reported directly to CEO Jimmy Haslam, begins in Chattanooga, Tennessee later this month. That trial is likely to generate headlines that could be damaging to the entire Haslam family, including Gov. Haslam, regardless of the company’s ownership structure going forward.
A Business Insider report on Tuesday suggests CEO Jimmy Haslam’s management role in the company will diminish rapidly over the next six years before Berkshire Hathaway owns 100 percent of the company:
For the time being, Cleveland Browns owner Jimmy Haslam’s family will remain as the majority shareholder, while Haslam will stay as CEO.
Should both Gov. Haslam and Rep. Marsha Blackburn announce their candidacies for the Republican nomination for the U.S. Senate, it will set up an epic battle between establishment Republicans, who will back Haslam, and Trump supporters, who will back Blackburn.
Unlike the Alabama Republican runoff, in which President Trump backed the establishment endorsed candidate who lost, Senator Luther Strange (R-AL) while Trump supporters backed the winning conservative candidate, Judge Roy Moore, the president would be unlikely to back such a prominent never Trumper as Bill Haslam.
President Trump won the state in a landslide over Hillary Clinton in the 2016 Presidential election by a 61 percent to 35 percent margin, winning 92 of the state’s 95 counties.