Berkshire Hathaway to Buy BNSF

Warren Buffett’s Berkshire Hathaway announced Tuesday it will buy the Burlington Northern Santa Fe railroad in a transaction worth an estimated $34 billion.

Buffett said in a statement the outright purchase of the Class 1 railroad was “an all-in wager on the economic future of the United States.”

Berkshire Hathaway, which already owns more than 22 percent of the Fort Worth, Texas-based railroad, will pay $100 a share for the remaining shares. The price marks a 32 percent premium on the company’s $76-a-share closing price Monday and is almost double what BNSF shares were selling for in March, when the price dipped to $51.20 a share.

BNSF Chairman, President and CEO Matthew K. Rose said the railroad’s leadership is “thrilled to have an opportunity to become a part of the Berkshire Hathaway family.”

“We admire Warren’s leadership philosophy supporting long-term investment that will allow BNSF to focus on future needs of our railroad, our customers and the U.S. transportation infrastructure,” Rose said in a statement. “This transaction offers compelling value to our shareholders and is in the best interests of all of our constituents including our customers and employees.”

BNSF said that including the shares Buffett already owns and $10 billion in outstanding debt, the transaction is worth $44 billion.