Agency finishes review of Berkshire’s BNSF buyout

Posted Tuesday, Dec. 08, 2009 Comments   (0)  Print Share Share Reprints
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From staff and wire reports

OMAHA, Neb. — The announced $26.3 billion buyout of Fort Worth-based Burlington Northern Santa Fe Corp. is a step closer to completion.

Warren Buffett’s Berkshire Hathaway said Monday that the Federal Trade Commission has ended an antitrust review of its proposed deal to acquire the big railroad operator. The companies said they expect the transaction to close in the first quarter of next year.

In early November, Berkshire agreed to pay $100 a share in cash and stock for the 77.4 percent of BNSF shares that it didn’t already own. The purchase would be the largest ever for Buffett’s holding company, based in Omaha.

Burlington Northern owns BNSF Railway Co., which operates 32,000 miles of track in 28 states and two Canadian provinces. It is a major hauler of grain, coal and consumer products.

Berkshire built its stake in Burlington Northern over the past two years before announcing plans to buy the entire company. Berkshire has scheduled a Jan. 20 special meeting in Omaha where shareholders will be asked to approve a 50-for-1 split of Berkshire’s Class B stock to complete the deal.

Buffett, who oversees Berkshire’s collection of insurance, energy and consumer goods businesses, is taking on debt and drawing down cash holdings to finance what he calls an “all-in wager” on the U.S. economy. Berkshire revealed in regulatory filings last month that it would sell stakes in competing railroad companies Union Pacific Corp. and Norfolk Southern Corp., and Buffett has since said that those shares have been sold.

Burlington Northern shares (ticker: BNI) rose 9 cents to $98.75 in light trading Monday. Berkshire’s Class B shares (ticker: BRK-B) slipped $4.66 to $3,315.34.

JPMorgan Chase & Co. and Wells Fargo & Co. are arranging an $8 billion loan for Berkshire to help finance the takeover. Berkshire has reported two straight quarterly profit increases.

The deal is the subject of legal skirmishing in Texas and Delaware as lawyers representing shareholders argue whether Buffett’s offer is high enough. More than a dozen attorneys gathered last week in the Tarrant County courtroom of state District Judge Dana Womack for one in a series of hearings on how and where the cases will go forward.

It’s expected that by the end of this week’s end, the four cases in Tarrant County, three in Dallas County and five in Delaware will be consolidated into one class-action lawsuit, lawyers said.

Staff writer Bob Cox contributed to this report, which contains material from The Associated Press.

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