Warren Buffett’s Berkshire Buying Burlington Northern Railroad

November 3, 2009

(ChattahBox) Berkshire Hathaway Inc. announced on Tuesday it has agreed to completely buy Burlington Northern Santa Fe Corp. in a deal valuing the railroad at $34 billion.  Berkshire Hathaway already owns a stake of about 22.6 percent in Burlington Northern, and said it will pay $100 a share in cash and stock for the 77.4 percent of the railroad’s shares it does not already own. The price represents a premium of 31.5 percent over Burlington Northern’s closing stock price on Monday. Berkshire also will assume $10 billion of outstanding Burlington Northern debt.  In sealing the biggest acquisition in the company’s history famed investor Warren Buffett called it, “an all-in wager on the economic future of the United States.”

The deal has been approved by the boards of both companies. It would be the biggest acquisition ever for Berkshire Hathaway Inc.

Berkshire also owns MidAmerican Energy Holdings, which controls power companies in the Midwest and Pacific Northwest. The railroad acquisition was seen as complementary, giving it access to the coal fields of the West as well as West Coasts ports and Mexico and Canada.

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