OMAHA, NE (AP) — Warren Buffett's $32 billion deal to buy Precision Castparts might lead to downgrades of credit ratings for his Berkshire Hathaway conglomerate.
Standard & Poor's Ratings Services said Tuesday it is reviewing Berkshire's overall "AA" credit rating because the deal will reduce the company's cash reserves and may force Berkshire to borrow more.
The acquisition of Precision Castparts was announced Monday, and it is expected to be completed early next year.
S&P says it will decide within the next 90 days whether to downgrade Berkshire's ratings once it learns more about how it plans to pay for the acquisition.
Berkshire already owns more than 80 subsidiaries, including insurance, railroad, utility, clothing, furniture and jewelry firms. It also has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co.
