NEW YORK (AP) -- The biggest name in investing is making what he calls an "all-in wager" on the U.S. economy -- $34 billion to own a railroad that hauls everything from corn to cars across the country.
The acquisition of Burlington Northern Santa Fe, the nation's second-largest railroad, would be the biggest ever for Warren Buffett's Berkshire Hathaway investment company.
It's a natural fit for the Oracle of Omaha, a city with a special place in railroad history. It was the starting point for the westward push of the transcontinental railroad. Today, Omaha is the headquarters of Union Pacific, and BNSF trains rumble through every day.
In a statement, Buffett, whose investing decisions are carefully scrutinized by the world of finance, voiced confidence in the railroad industry.
"Most important of all, however, it's an all-in wager on the economic future of the United States. I love these bets," he said Tuesday.
Berkshire Hathaway Inc. already owns a 22 percent stake in Burlington Northern and would buy up the rest under the deal, for a total value of $34 billion. It still needs approval from Burlington shareholders and antitrust regulators, both expected early next year.
Burlington Northern is the biggest hauler of corn and coal for electricity, making it an indicator of the country's economic health. It also carries everyday items such as refrigerators, clothing and TVs from Western ports like Los Angeles and Seattle.
Berkshire will pay $100 a share in cash and stock for the rest of the company, more than a 30 percent premium on the Monday closing price of Burlington Northern shares. Shareholders will have the option of a $100 cash payment per share or common stock in Berkshire.
Burlington Northern Santa Fe Corp. stock shot up 27 percent to $97 Tuesday.
Print this story
E-mail this story
