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A handout photo of a Phillips 66 gas station.
A handout photo of a Phillips 66 gas station.
(ConocoPhillips)

Warren Buffett goes big on North American energy

Anything associated with Warren Buffett attracts investor attention. But his deal with Phillips 66 drove the shares up 3 per cent on Tuesday, despite the fact that Mr. Buffett, through Berkshire Hathaway Inc., sold the energy company’s shares as opposed to buying them.

The deal saw Berkshire Hathaway buy Phillips 66’s pipeline services unit for $1.4-billion (U.S.) in stock – as in, Berkshire surrenders its holdings in Phillips 66 stock rather than pay cash for the asset. As Ben Levisohn at Barron’s points out, the structure of the deal suggests that Mr. Buffett believes the energy company’s stock could be a tad pricey after a 45 per cent run-up this year.