Berkshire Buys Burlington in Buffett’s Biggest Deal (Update2) Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Andrew Frye and Hugh Son

Nov. 3 (Bloomberg) -- Warren Buffett’s Berkshire Hathaway Inc. agreed to buy railroad Burlington Northern Santa Fe Corp. in the company’s biggest takeover.

Buffett’s firm will pay $26 billion, or $100 a share in cash and stock, for the 77.4 percent of the railroad it doesn’t already own. Including his previous investment and the assumption of debt, the value of the deal is about $44 billion, Omaha, Nebraska-based Berkshire said in a statement today. That compares with the railroad’s closing price yesterday of $76.07.

“It’s an all-in wager on the economic future of the United States,” Buffett said in the statement.

Berkshire has been building a stake in the Fort Worth, Texas-based railroad for more than two years as Buffett looked for what he called an “elephant”-sized acquisition in which he could deploy his company’s cash hoard, valued at more than $24 billion as of the end of June. Trains stand to become more competitive against trucks with fuel prices high, he has said.

“It is Warren being Warren, taking advantage of a market that is soft at a time when the possibility for competitive bids is relatively low,” said Tom Russo, a partner at Gardner Russo & Gardner, which holds Berkshire shares. “He looks at this as a business that has advantages against other forms of transportation.”

At $100 a share, Buffett is paying 18.2 times Burlington’s estimated 2010 earnings of $5.51, according to the average analyst projection in a Bloomberg survey. That compares with the 13.4 multiple for the Standard & Poor’s 500 Index as of yesterday’s close. Burlington Northern shares have dropped 13 percent in the 12 months through yesterday

Warrent Buffet đã quyết định mua cổ phiếu đến 44 tỷ đô thì niềm tin vào thị trường chứng khoáng sẽ được nâng cao