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Tuesday, November 3, 2009
Warren Buffett's biggest bet: Railroad worth $44B, as oil rises

Billionaire Warren Buffett's Berkshire Hathaway Corp., an insurance and manufacturing conglomerate based in Omaha, is taking over Burlington Northern Santa Fe Corp. which ties Chicago, Houston and the whole West by rail.

It's a bet that U.S. shipping will recover - and that oil prices will rise, since rail transport is way cheaper than trucks.

"It's an all-in wager on the economic future of the United States," Buffett said in this statement. "I love these bets."

Updated: Deal includes $26 billion ($100/share) cash, plus assumption of BNSF debt. With existing Buffett holdings, values the railroad at $44 billion, or $100/share, vs recent $76/share trading price, says Bloomberg here.

Posted by Joseph N. DiStefano @ 9:33 AM  Permalink | Post a comment
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About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column, which is printed in the business pages of The Philadelphia Inquirer every Sunday, Tuesday, Wednesday, Thursday and Friday. Joe has worked at the Inquirer, mostly, since 1988. He has also written for Bloomberg and Gannett, authored the book Comcasted, majored in economics at Penn, and fathered six children. Reach Joe at 215-854-5194 and JoeD@phillynews.com

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