In a major buyout, Berkshire Hathaway Inc agreed to buy chemical and lubricant maker Lubrizol Corp for $9 billion in cash.

It was two weeks back when the group’s owner, Warren Buffett talked about his plans to use its huge cash pile. In his annual letter to Berkshire Hathaway shareholders, he mentioned that he was looking for acquisitions as an outlet to deploy his $38 billion cash pile.

In a statement, he said that Lubrizol was exactly the sort of company with which they would love to partner.

Offering a 28% premium to Lubrizol's closing price, Berkshire will acquire Lubrizol for $135 per share. This is coming out to be the biggest deal for the firm in last six years and it will also include a debt of $0.7 billion.

The firm showed a good profit in the last quarter which gave the hint about the increasing demand for chemicals needed to operate engines and other machinery.

Lubrizol is known to produce and supply lubricant additives for engine oils, as well as industrial lubricants and fuel additives for gasoline and diesel and it also makes ingredients for personal care products and pharmaceutical drugs. It is the employer of 6,900 workers worldwide and had revenue of $5.4 billion in 2010.