Precision Castparts will pay $21 million to settle investor lawsuit over sale

Precision Castparts Corp. has agreed to pay $21 million to settle a class-action lawsuit over the Portland company’s $37 billion sale in 2016.

A group of investors sued Precision Castparts following its sale to Berkshire Hathaway, Warren Buffett’s investment firm, arguing that the sale price undervalued the company. Such litigation is common following any large financial transaction involving publicly traded companies; the settlement represents 0.06% of Precision Castparts’ sale price.

Law360 first reported the settlement, filed Friday in U.S. District Court in Portland. The court must approve the settlement and set payment details for the plaintiffs and attorneys.

Precision Castparts makes heavy metal components for airplanes, generators and other industrial products. It did not admit to any wrongdoing in the lawsuit and declined additional comment Monday.

The company’s $37 billion sale is the largest sum ever paid for an Oregon company and the largest ever by Berkshire Hathaway. But Buffett has tacitly acknowledged having paid far too much.

In August, Berkshire Hathaway wrote down the value of the Portland company by $10 billion. Precision Castparts has been buffeted by manufacturing problems and a declining market for aircraft following Boeing’s 737-MAX crisis and reduced air travel during the pandemic.

Precision Castparts said last fall that it would cut its workforce by 40% by the end of 2020. The company said in July that it had laid off 717 in Oregon during 2020 and hasn’t updated that figure since.