Legendary investor Warren Buffett-led Berkshire Hathaway will acquire the remaining stake in Burlington Northern Santa Fe Corp, which it does not own, in a transaction worth USD 44 billion.
The transaction would be the largest buyout in the history of Berkshire.
Both companies have entered into a definitive agreement, whereby Berkshire would acquire the remaining 77.4 per cent of Burlington Northern’s outstanding that it does not hold now, for USD 100 per share in cash and stock.
“Based on the number of outstanding BNI shares (including shares currently owned by Berkshire) on November 2, 2009, the transaction is valued at approximately USD 44 billion, including USD 10 billion of outstanding BNSF debt, making it the largest acquisition in Berkshire Hathaway history,” Berkshire said in a statement on Tuesday.
BNSF is a holding company and through its principal operating subsidiary, BNSF Railway Corp, it owns one of the largest railroad systems in North America.
Buffett, who is the Chairman and Chief Executive of Berkshire, said the country’s future prosperity depends on its having an efficient and well-maintained rail system.
“Conversely, America must grow and prosper for railroads to do well. Berkshire’s USD 34 billion investment in BNSF is a huge bet on that company…,” Buffett added.