Buffett's firm to buy Burlington Northern
Berkshire Hathaway will acquire unowned stake of railroad in a cash-and-stock deal worth $44 billion.
NEW YORK (CNNMoney.com) -- Warren Buffett's Berkshire Hathaway said Tuesday it will buy railroad operator Burlington Northern Santa Fe for $44 billion.
Widely regarded as both one of the world's richest men and the investment community's more brilliant minds, Buffett called his firm's investment an "all-in wager on the economic future of the United States."
"Our country's future prosperity depends on its having an efficient and well-maintained rail system," Buffett said in a statement.
Separately, Berkshire said it was announcing a 50-for-1 split of its Class B common stock. The majority of stock issued by the company in its purchase of Burlington Northern will be its pricier Class A shares, the company said.
The deal, which would rank as the largest acquisition in Berkshire Hathaway's history, would also include $10 billion of Burlington Northern debt.
It would also expand the already massive portfolio of companies Berkshire already owns. Brand-name businesses such as auto insurer Geico, See's Candy and Fruit of the Loom are all subsidiaries of the Omaha, Neb.-based firm.
Matthew Rose, Burlington Northern's chairman and CEO, said the sale of the Fort Worth, Texas-based firm was a "strategic fit" for both the company's customers and employees, during a conference call with investors Tuesday.
No management changes are expected at Burlington Northern as a result of the deal, which is expected to close sometime in early 2010.
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