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Warren Buffett Berkshire Hathaway to buy Burlington Northern Santa Fe Corp railway

By Robert J. Steiner for CEOWORLD Magazine Updated:November 3, 2009

Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) announced a deal to take over railroad operator Burlington Northern Santa Fe Corp (NYSE:BNI). In its largest-ever acquisition, Berkshire Hathaway Inc will pay $26 billion for Burlington Northern Santa Fe Corp.

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.

If you remember Buffett poured billions into preferred shares of General Electric (NYSE:GE) and Goldman Sachs (NYSE:GS) in late-2008, but have paid off in a big way.

Berkshire Hathaway Inc. already owns a stake of about 22 percent in Burlington Northern, and says it will pay $100 a share for the rest of the company.

In an interview on CNBC, Mr Buffett said that the deal with Burlington Northern came together quickly last week, when he made a proposal to Matthew Rose, the chairman and chief executive of the business. It took Mr Rose just 15 minutes to get approval from his board.

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