Buffett said Johns Manville would be a good fit with Berkshire Hathaway's diversified portfolio.
The offer represents about a 17 percent premium on Johns Manville stock, based on Tuesday's closing price of $10-3/4.
Johns Manville said it would start a tender offer for its outstanding shares no later than Jan. 3 to commence the deal. The deal follows failed merger negotiations for Johns Manville with a group of private investors. The proposed $3 billion offer from takeover firm Hicks, Muse, Tate & Furst fell apart on Dec. 8 after lower-than-expected earnings from Johns Manville and weak industry conditions.
Johns Manville also said it would repurchase about $135 million in stock at a price of $13 per share from The Manville Personal Injury Settlement Trust, which owns about 76 percent of the outstanding shares of Johns Manville. The Denver-based company said the repurchase would raise its 2000 earnings by 25 cents per share.
The merger offer is subject to shareholder and regulatory approval. The Settlement Trust has agreed to the offer, the company said.
``All of us at Johns Manville are pleased to know that Warren Buffett recognizes the long-term value of our company, and the consistent performance our people have delivered over the years,'' Jerry Henry, chairman and chief executive, in a statement.
Buffett, chairman of Omaha, Neb.-based Berkshire Hathaway said, ``We are pleased about the opportunity to own a company with such strong market positions, leadership, and financial performance.''
Buffett is famous for hand-picking companies that he believes have the potential for success and then bringing that to fruition.