And this plan was vital to Buffett, who said he would never have gone ahead with the deal if he was not “100 percent sure” that Donegan would be in charge for a long time to come.

Mr Buffett, known for buying undervalued and often unloved companies, acknowledged the high price.

“For good reasons, [it] is the supplier of choice for the world’s aerospace industry, one of the largest sources of American exports” Buffett said.

Last Friday, Berkshire said its insurance units had $85.1 billion of “float”, or the amount of premiums held before claims are paid, as of June 30.

“People are looking at this as a buying opportunity”, Larry Weiss, head of trading at brokerage Instinet, said of the Precision Castparts deal.

“They have these incredibly long relationships with some of their customers”.

Buffett, though, isn’t the only major investor to capitalize on Precision’s rough year on the market.

Buffett told CNBC that the acquisition would have gone ahead even if he knew that energy prices were in the midst of a multi-year slump.

Precision Castparts is an industry leader in manufacturing complex metal components and serves the aerospace, power, and general industrial markets.

Berkshire Hathaway’s previous largest deal was the 77-percent stake purchasing of the Burlington Northern Railroad for $26 billion in 2009. While results have been pressured lately on the energy side, pushing down the stock price, that’s probably no bother to Buffett, who is looking for long-term bets where high barriers to entry would discourage potential rivals. Precision Castparts’ shares jumped 19.1 percent to $230.92, while Berkshire’s Class B shares dipped 0.1 percent to $143.42. The $37 billion deal would be one of Berkshire’s largest acquisitions ever. The company’s strong management and consistent operating history fall in line with Buffett’s investing strategy. Precision Castparts gave the biggest boost to the index and the second biggest boost to the S&P 500.

PCC will continue to do business around the world under the Precision Castparts name and maintain its headquarters in Portland, Oregon, USA.

With a company the size of Berkshire Hathaway, Buffett needs to strike big deals to meaningfully improve profits.

“We are fully compliant with PCBG funding requirements, ERISA guidelines and are mindful of our fiduciary responsibilities to the beneficiaries of the fund”, Precision said in a statement.