Warren Buffett's Berkshire Hathaway said Tuesday it will buy railroad operator Burlington Northern Santa Fe for $44 billion.
Berkshire (BRKA, Fortune 500), which already has major stake in Burlington Northern, said it would acquire the remaining 77.4% of the company in a cash-and-stock offer worth $100 per share.
Widely regarded as both one of the world's richest men and the investment community's more brilliant minds, Buffett called his firm's investment an "all-in wager on the economic future of the United States."
"Our country's future prosperity depends on its having an efficient and well-maintained rail system," Buffett said in a statement.
Burlington Northern (BNI, Fortune 500) shares soared 28% in morning trading on the news.
Separately, Berkshire said it was announcing a 50-for-1 split of its Class B common stock. The majority of stock issued by the company in its purchase of Burlington Northern will be its pricier Class A shares, the company said.
The deal, which would rank as the largest acquisition in Berkshire Hathaway's history, would also include $10 billion of Burlington Northern debt.
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.
Matthew Rose, Burlington Northern's chairman and CEO, said the sale of the Fort Worth, Texas-based firm was a "strategic fit" for both the company's customers and employees, during a conference call with investors Tuesday.
No management changes are expected at Burlington Northern as a result of the deal, which is expected to close sometime in early 2010.
Berkshire's purchase, of course, will require the approval of shareholders and will have to undergo regulatory review by the Justice Department.
#1
This is interesting contrast to the article yesterday about Soros touting China as the new leader. This is a big bet on the US. Only one of these men can be right. Buffett was the only one with the balls to put his money in and not just his mouth.
Buffett has bet against the dollar (like Soros) and lost in the past, but when he's taking advantage of weakness while betting on American economic recovery, there's almost nobody better.
Ima take Buffett to win and I'll give 6 points to Soros.
Posted by: Mike N. ||
11/04/2009 8:49 Comments ||
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#2
Actually this sounds like Buffet doing a bit of vertical integration coverage. BNSF hauls almost exclusively coal for its cargo, combined with his current energy holdings plus his stance on cap and trade basically seems to cover what hes planning. If it adds a side benefit of making electricity cheaper while making him money I say go for it.
#5
Hard to knock, if you take a long enough time frame. Railroads are a very limited commodity, and it is virtually impossible to add new ones. They are the most energy-efficient method of moving bulk cargo across the country. BNSF is one of the very best positioned railroads. If you assume energy costs will continue to rise (safe bet, long term) then railroads will be a good investment. If they don't go bankrupt first. And if the government doesn't nationalize them or otherwise block your investment return.
#1
From what? From the ravages of the swine flu? Probably, since there is only one pig in this Moslem country. The mission is not to 'save' this country but to protect ourselves down the road.One of the reasons that resistence has risen in Afghanistan is seldom mentioned. The Paks are putting enough pressure on the Taliban and Al Qaeda that they are oozing across the border into our play ground. I call that good news.
Posted by: Richard of Oregon ||
11/04/2009 14:19 Comments ||
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#2
I forgot to mention that Afghanistan isn't going anywhere. The really big question is, "are we?"
Posted by: Richard of Oregon ||
11/04/2009 14:21 Comments ||
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#3
Contrary to popular belief, the MAGINOT LINE DID ITS JOB - THE FRENCH STATE + MIL DIDN'T DO THEIRS. SOUTH VIETNAM may still be around iff the US, ALLIES had built one for it.
POORLY DEFENDED BORDERS helped NORTH KOREA attack SOUTH KOREA in 1950.
CAN AFPAK be saved iff the US-ALLIES fail to show AFPAK locals why their way or methodism is better for them than the $$$ + JOBS-SECURITY, ETC. OF THE MILITANT-CONTROLLED DRUG TRADE???
To paraphrase GEN. DOUGLAS MACARTHUR . PROLONGED INDECISION ONLY RESULTS IN PROLONGED WAR + PROLONGED CASUALTIES [both sides].
A Saudi court of cassation upheld a ruling to behead and crucify a 22-year-old man convicted of raping five children and leaving one of them to die in the desert, newspapers reported on Tuesday.
The convict was arrested earlier this year after a seven-year old boy helped police in their investigation. The child left in the desert after the rape was three years old, Okaz newspaper said.
International rights groups have accused the kingdom, the birthplace of Islam, of applying draconian justice, beheading murderers, rapists and drug traffickers in public. So far this year about 40 people have been executed in Saudi Arabia.
In Saudi Arabia, crucifixion means tying the body of the convict to wooden beams to be displayed to the public after beheading. Looks like they got that process out of order. Oh well. The end result is the same.
From: A Faire To Remember
words and music by Eric Idle
Some things in life are bad
They can really make you mad
Other things just make you swear and curse.
When you're chewing on life's gristle
Don't grumble, give a whistle
And this'll help things turn out for the best...
And...always look on the bright side of life...
Always look on the light side of life...
If life seems jolly rotten
There's something you've forgotten
And that's to laugh and smile and dance and sing.
When you're feeling in the dumps
Don't be silly chumps
Just purse your lips and whistle - that's the thing.
And...always look on the bright side of life...
Always look on the light side of life...
For life is quite absurd
And death's the final word
You must always face the curtain with a bow.
Forget about your sin - give the audience a grin
Enjoy it - it's your last chance anyhow.
So always look on the bright side of death
Just before you draw your terminal breath
Life's a piece of $hit
When you look at it
Life's a laugh and death's a joke, it's true.
You'll see it's all a show
Keep 'em laughing as you go
Just remember that the last laugh is on you.
And always look on the bright side of life...
Always look on the right side of life...
(Come on guys, cheer up!)
Always look on the bright side of life...
Always look on the bright side of life...
(Worse things happen at sea, you know.)
Always look on the bright side of life...
(I mean - what have you got to lose?)
(You know, you come from nothing - you're going back to nothing.
What have you lost? Nothing!)
Always look on the right side of life...
#4
I think they got it right on this one. Rape five kids, one three years old and then leave the kid in the desert to die? A beheading and crucifixion is an easy ruling. Allowing the world to see how child rapists are treated is a bonus!
Posted by: 49 Pan ||
11/04/2009 16:49 Comments ||
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#5
You know i concur with the sentiment. However, i've never actually seen any verifiable proof that Saudi Arabia actually carries out these "draconian" measures. Is it only 'saber-rattling'? Where's the proof?
A multi-volume chronology and reference guide set detailing three years of the Mexican Drug War between 2010 and 2012.
Rantburg.com and borderlandbeat.com correspondent and author Chris Covert presents his first non-fiction work detailing
the drug and gang related violence in Mexico.
Chris gives us Mexican press dispatches of drug and gang war violence
over three years, presented in a multi volume set intended to chronicle the death, violence and mayhem which has
dominated Mexico for six years.
Rantburg was assembled from recycled algorithms in the United States of America. No
trees were destroyed in the production of this weblog. We did hurt some, though. Sorry.
