Buffett Bets Billions on Burlington Northern

Warren Buffett's Berkshire Hathaway (BRK.A) said Tuesday that it will acquire the remaining shares of railroad operator Burlington Northern Santa Fe (BNI 76.07) that it doesn't already own for $100 per share in cash and stock in a deal valued at approximately $44 billion.

Berkshire Hathaway currently owns more than 22% of outstanding BNI shares and will acquire the remaining shares to increase its holdings to 100%.  Based on the nubmer of BNI shares outstanding (including shares currently owned by Berkshire), the transaction is valued at approximately $44 billion, including $10 billion of outstanding BNI debt.  The deal is the largest acquisition in Berkshire Hathaway history.

"Our country's future prosperity depends on its having an efficient and well-maintained rail system," said Berkshire CEO Warren E. Buffett.  "Conversely, America must grow and prosper for railroads to do well. Berkshire's $34 billion investment in BNSF is a huge bet on that company, CEO Matt Rose and his team, and the railroad industry."

"Most important of all, however, it's an all-in wager on the economic future of the United States," said Buffett. "I love these bets."

Closing of the transaction is expected to occur during the first quarter of 2010.