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Suppose Berkshire Hathaway (BH) is contemplating an acquisition of Johnson & Johnson (J&)), which currently has 2.75 billion shares outstanding at a price of $64.18
Suppose Berkshire Hathaway (BH) is contemplating an acquisition of Johnson \& Johnson (J\&)), which currently has 2.75 billion shares outstanding at a price of $64.18 and $14.5 billion of debt. Warren Buffett (the CEO of BH ) thinks J\&J is seriously undervalued. Based on his projections of free cash flow (FCF), he estimates the firm to be worth $270 billion. Given this, he tenders an offer to the J\&J board of directors to pay $77 per share for J\&J, using shares of BH to provide this value. This represents about a 20 percent premium, and the directors immediately accept. BH currently has 1.65 million shares outstanding at a price of $123,200 each and $38 billion of debt. There are no expected synergies from completing this acquisition. For all of the below questions, you should assume that Warren Buffett has correctly estimated J\&J's value, and that BH is correctly valued by the market. What is the asset value of the combined firms? Your answer should be rounded to two decimal places
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