Buffett bets big on US rail industry
- Source: Global Times
- [08:28 November 05 2009]
- Comments
Warren Buffett unveiled Tuesday a deal to take over Burlington Northern Santa Fe (BNSF), one of the largest rail operators in North America, calling it a huge bet on the future of the US economy.
The billionaire's Berkshire Hathaway Group said it would purchase 77.4 percent of BNSF for $100 per share in cash and stock.
The offer values the rail operator at $44 billion, including $10 billion in debt. Buffett will invest about $26.3 billion for the new stake.
'It's an all-in wager on the economic future of the United States. I love these bets," said Buffett, known in financial circles as the 'Oracle of Omaha" for his investing acumen.
The takeover bid represents a 31 percent premium over BNSF's closing price Monday.
'Our country's future prosperity depends on its having an efficient and well-maintained rail system," said Buffett, Berkshire Hathaway's chairman and chief executive, adding that the deal was the biggest ever for his storied investment fund.
'America must grow and prosper for railroads to do well," Buffett said, adding that 'the investment in BNSF is a huge bet on that company ... and the railroad industry."
BNSF President, Chairman and CEO Matthew Rose said the company welcomed the deal.
'This transaction offers compelling value to our shareholders and is in the best interests of all of our constituents, including our customers and employees," Rose said.
