GE's price reawakens Precision Castparts' hidden value inside Berkshire

A transaction agreed by GE Aerospace has put a price on a rare industrial capability: manufacturing metal parts able to survive inside the hottest and most demanding sections of an aircraft engine. The deal does not involve Berkshire Hathaway. Yet it directly informs the reading of one of Berkshire's less visible subsidiaries, Precision Castparts.

GE will acquire Consolidated Precision Products, or CPP, for $11.75 billion. The price is approximately 26 times expected 2027 EBITDA before synergies and 18 times after the savings and additional revenue GE expects to create. Precision Castparts operates in adjacent businesses: castings, forgings and critical components for aerospace, defence and turbines.

For Berkshire shareholders, GE's release does not assign a new official value to Precision Castparts. It provides something more cautious but still useful: an external price for a comparable industrial capability, just as Berkshire's subsidiary recovers its cash-generating power.

Where does Precision Castparts sit inside Berkshire?

Berkshire owns two broad families of assets. The first is its listed equity portfolio, including Apple, American Express and Coca-Cola. The second comprises controlled companies consolidated into its accounts: GEICO, BNSF, Berkshire Hathaway Energy and dozens of industrial and commercial subsidiaries.

Precision Castparts belongs to the second family. Berkshire acquired it in 2016 for approximately $32.7 billion including debt. It therefore does not appear in Berkshire's 13F portfolio of US-listed equities. It sits inside consolidated manufacturing operations, without a daily share price or separately published value.

That creates an important limit for Opulion: we cannot honestly state its weight as a percentage of Berkshire's gross assets, because Berkshire publishes neither a separate fair value, recent standalone EBITDA nor an official sum-of-the-parts valuation for Precision Castparts. A percentage built from the 2016 price or a press estimate would mix incompatible dates and methodologies.

The best current reference point is operational. Precision Castparts generated $2.4 billion of operating cash flow in 2025, versus an average of $0.9 billion in 2021 and 2022 and $1.7 billion in 2015 before the acquisition. Operating cash flow measures cash generated by the business before capital expenditure, financing and certain other movements. It is neither net income nor enterprise value.

What GE is buying at 26 times EBITDA

CPP manufactures complex cast and machined components for aerospace, defence and industrial applications. Such parts must satisfy tolerances, materials and certifications that are difficult to reproduce. GE is therefore buying more than machinery: qualified capacity, customer relationships, processes and accumulated industrial time.

The purchase will be financed with $7 billion of cash and the balance with new debt. GE expects closing in the second half of 2027. The 18 times multiple after synergies includes benefits GE still has to deliver; it is not today's observed standalone multiple. For a cautious comparison, 26 times before synergies is less dependent on the buyer's plan, although it still uses forecast 2027 EBITDA.

Why the comparison is tempting, and why it quickly breaks

CPP and Precision Castparts share exposure to critical aerospace components. The transaction therefore confirms that strategic buyers place substantial value on precision foundry capacity, particularly when aerospace backlogs require more output and qualified supply remains constrained.

Five differences can materially shift the multiple: aerospace, defence and energy mix; margins; required capital expenditure; customer concentration; and expected growth. GE is also paying a control value and synergies specific to its engine network. Berkshire already controls Precision Castparts and does not automatically receive the same benefits.

A secondary estimate has suggested a value near $100 billion for Precision Castparts using the comparable. Berkshire did not publish that number, and it cannot be reproduced from the available primary data. Without comparable EBITDA, standalone debt and perimeter adjustments, it must remain a press hypothesis, not an Opulion calculation.

What the signal changes for Berkshire shareholders

The GE transaction does not immediately change Berkshire's accounts. It does improve the reading of an asset whose value is obscured by consolidation. Since the large impairment recorded after the acquisition, Precision Castparts has recovered to operating cash flow above its pre-acquisition level. At the same time, a strategic industrial buyer is accepting a high multiple for a company in the same value chain.

The reasonable conclusion is therefore not that Precision Castparts is worth a specific amount. It is more useful: PCC's operational recovery is occurring in a market where qualified assets command high prices, while Berkshire still provides insufficient standalone data to quantify its share of group value precisely.

The next evidence to watch is Precision Castparts' 2026 cash flow, industrial capital expenditure and any additional disclosure on margins or backlog. Those figures can progressively connect performance with value without inventing a price.