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Published: 7 November 2009
BNSF sold to Warren Buffet outfit in US$44B deal
Berkshire Hathaway, Inc is set to acquire the outstanding stock of Burlington Northern Santa Fe for US$100 per share in both cash and stock
The boards of directors of Berkshire Hathaway, Inc and Burlington Northern Santa Fe Corporation have announced a definitive agreement under which Berkshire Hathaway will acquire for US$100 per share in cash and stock the remaining 77.4% of outstanding shares not currently owned to increase its holdings to 100%.
The deal is worth around US$44B including $10B of outstanding BNSF debt, making it the largest acquisition in Berkshire Hathaway's history.
“Our country’s future prosperity depends on its having an efficient and well-maintained rail system,” said Warren E Buffett, Berkshire Hathaway's chairman and CEO. “Conversely, America must grow and prosper for railroads to do well. Berkshire’s US$34B investment in BNSF is a huge bet on that company, CEO Matt Rose and his team, and the railroad industry.
“Most important of all, however, it’s an all-in wager on the economic future of the United States,” said Mr. Buffett. “I love these bets.”
“We are thrilled to have the opportunity to become a part of the Berkshire Hathaway family,” said Matthew K Rose, BNSF's chairman, president and CEO. “We admire Warren’s leadership philosophy supporting long term investment that will allow BNSF to focus on future needs of our railroad, our customers and the US transportation infrastructure. This transaction offers compelling value to our shareholders and is in the best interests of all of our constituents including our customers and employees.”
The transaction requires approval by holders of two thirds of BNSF’s outstanding shares (other than shares held by Berkshire Hathaway), and customary closing conditions, including Department of Justice review. Closing is expected to occur during the first quarter of 2010. BNSF Railway Company will continue to be based at Fort Worth, Texas.
Goldman, Sachs & Co and Evercore Partners, Inc acted as financial advisors to BNSF.