Tycoon Warren Buffett's Berkshire Hathaway will buy Precision Castparts, a leading metal products supplier to the aerospace industry, for $37.2 billion, the companies have said.
The agreed acquisition, one of Berkshire's largest takeovers, is expected to be completed in the first quarter of 2016, they said in a joint statement.
Precision Castparts' market value was $26.7 billion on Friday.
Berkshire is one of Precision Castparts' largest shareholders, with a roughly 3% stake worth $882 million as of 31 March, according to securities filings.
Though it began building that stake in 2012, it remains among the smaller investments in Berkshire's portfolio.
Such investments are normally picked by Buffett's investment managers, Todd Combs and Ted Weschler.
The addition of Precision Castparts would extend Buffett's decade-long push into the industrial sector, where he has bought such companies as parts maker Marmon, Israeli toolmaker Iscar, and specialty chemicals company Lubrizol.
He considers those companies among his 'Powerhouse Five' collection of non-insurance businesses that contribute greatly to Omaha, Nebraska-based Berkshire's bottom line.
Precision Castparts makes components such as nuts, bolts and other fasteners for aerospace companies such as Airbus Group and Boeing, an industry that accounts for roughly 70% of sales. It also makes products such as pipes and fittings for power and industrial companies.
The company reported a profit of $1.53 billion on net sales of $10 billion for its fiscal year ended 29 March.
But it has struggled with slack demand in some businesses, and last month missed analysts' quarterly profit forecasts as Chief Executive Officer Mark Donegan lamented a "challenging" oil and gas environment.
Precision Castparts shares have fallen 29% since June 2014, and have lagged the Standard & Poor's by close to 30 percentage points over the last five years.
Berkshire shares have also lagged that index over five years, but by a smaller percentage.
A purchase would likely let Berkshire deploy much of its $66.59 billion of cash, while still leaving the $20 billion cushion Buffett wants.
Berkshire's biggest purchase is the $26.5 billion takeover in 2010 of the 77.4% of the Burlington Northern Santa Fe railroad it did not already own. It has more than 80 operating businesses.
