Already owning a 22% stake in the Burlington Northern Santa Fe Railroad, Warren Buffet announced earlier Tuesday that his Berkshire-Hathaway Group reached an agreement with BNSF's board of directors to purchase the remaining shares of BNSF in a $44 billion deal. This would make the railroad the single largest investment by Berkshire-Hathaway [NYSE: BRK-A].
Wall Street seemed to take the news rather well.
Burlington Northern Santa Fe [NYSE: BNI] closed at $97 a share, up 27.51% in a single day.
Canadian National [NYSE: CNI] closed at $49.99, up 2.73%
Canadian Pacific [NYSE: CP] closed at $45.53, up 4.24%
CSX Transportation [NYSE: CSX] closed at $45.97, up 7.31%
Kansas City Southern [NYSE: KSU] closed at $25.79, up 7.1%
Norfolk Southern [NYSE: NSC] closed at $45.15, up 5.4%
Omaha-based Union Pacific [NYSE: UNP] closed at $59.41, up 7.9%
Just wanted to say thanks for the comment on my blog - got a lot of work to do and been blogging a bit too much today (very happy with the GOP win in NJ :).
ReplyDeleteHope to catch up soon - nice to see the blog is going well, the entries look great.
Hopefully cap and trade doesn't kill BNSF's coal routes seems they transport a lot of coal every day. Also noticed they service a lot of Buffets other businesses.Could we be looking at a Standard Oil type of move where he is trying to monopolize the transport rather than the commodity?
ReplyDeletespongebubba103 said...
ReplyDeleteHopefully cap and trade doesn't kill BNSF's coal routes seems they transport a lot of coal every day. Also noticed they service a lot of Buffets other businesses.Could we be looking at a Standard Oil type of move where he is trying to monopolize the transport rather than the commodity?
Part of me is inclined to think that Mr. Buffet made this purchase because he might know something about cap & trade that most of us don't (either cap & trade is dead in the water or Powder River coal is classified as 'clean' and gets a repireve).
A map of the present-day Union Pacific or BNSF looks like (hypothetical) end results of the rail baron's proposed mergers that led to Teddy Roosevelt's 'trust-busting' nearly 100 years ago. Buffet probably figures that the traffic base is diverse enough (coal, grain, intermodal, ethanol, etc) for his new investment to withstand any adverse economic climate. The 'monopoly' train left the station in 1996 when Union Pacific's takeover of the Southern Pacific and Chicago & Northwestern and the merger between Burlington Northern and Atchison, Topeka & Santa Fe were apporved.