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Buffett's Berkshire Hathaway to buy P&G's Duracell

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[November 13, 2014]  (Reuters) - Warren Buffett's Berkshire Hathaway Inc <BRKa.N> said it would buy Procter & Gamble Co's Duracell battery business in exchange for its entire $4.7 billion stake in the world's No. 1 household products maker.

P&G, whose brands include Pampers diapers and Tide detergent, said it would contribute about $1.8 billion in cash to recapitalize Duracell before the transaction.

Shares of P&G, which also reiterated its full-year organic sales and core earnings growth forecasts, fell about 1 percent before the bell.

The household products maker said in August it could sell about half of its slow-growing brands and last month said it would sell Duracell to focus on faster-growing brands.

Demand for Duracell's mainstay non-rechargeable, disposable alkaline batteries has waned while a worldwide explosion in electronic devices has increased demand for re-chargeable batteries.

Berkshire owned about 52.8 million shares in P&G as of June 30, or a stake of about 1.9 percent, according to the most recent regulatory filing. (http://1.usa.gov/1lZ2Ca3)

"I have always been impressed by Duracell, as a consumer and as a long-term investor in P&G and Gillette," Berkshire Hathaway Chief Executive Warren Buffett said in a statement.

P&G said it would take a non-cash charge of about 28 cents per share in the current-quarter and said it expects to close the deal in the second half of next year.

Goldman Sachs & Co is P&G's financial adviser and Jones Day acted is its legal adviser.

(Reporting by Devika Krishna Kumar and Yashaswini Swamynathan in Bangalore; Editing by Savio D'Souza)

[ 2014 Thomson Reuters. All rights reserved.]

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