Abel is able to play ball

The Oracle of Omaha is not an easy act to follow, but so far, Greg Abel is making his predecessor proud. Yesterday, Berkshire Hathaway agreed to acquire homebuilder Taylor Morrison Home for $6.8 billion.

The deets: Berkshire will pay $72.50 per share for Taylor Morrison, which is a 24% premium to where shares of Taylor Morrison ended trading May 29. Despite the hefty price tag, the acquisition is still worth only 2% of Berkshire’s cash hoard, which reached $397 billion in Q1.

Taylor Morrison shares jumped 22.31% today, while Berkshire fell 0.88%.

Betting on building

The deal comes at an interesting time for the housing market: High mortgage rates are keeping it down in the dumps, and new home sales fell 6.2% in April. But buying a fundamentally healthy company for a discounted price is a page straight out of Warren Buffett’s playbook. And the fact that Berkshire sees opportunity in homebuilding indicates that the storied investment giant may be foreseeing a turnaround.

Berkshire already has its hands in a slew of real estate businesses, including Clayton Homes, as well as Berkshire Hathaway HomeServices, which is the biggest residential real estate brokerage franchise in the country, according to CNBC.

Greg’s big launch

The acquisition is not just a strategic one, but an emblematic first for Abel, who took over as CEO of Berkshire Hathaway in January of this year. And today, Grandpa Buffett is one proud former CEO. “Greg did that faster than I could have done it, smoother than I could have done it, and I never talked to the CEO. He has launched,” Buffett himself told CNBC this morning.

While Buffett may be the Oracle of Omaha, perhaps Abel will be dubbed the Diviner of Deals.—LB