Warren Buffett is tripling down on Burlington Northern Santa Fe Corporation. Berkshire Hathaway Inc., the company Buffett controls, announced November 3 that it had agreed to buy the 77 percent of the railroad that it doesn’t already own for $44 billion in cash, stock, and assumed debt. The deal would be the largest in Berkshire’s history.
Burlington shareholders stand to receive $100 in cash or the equivalent in Berkshire stock per share, which reflects a premium of 31 percent to the company’s closing price on November 2. Berkshire will split its Class B shares 50-for-1 to accommodate small Burlington stockholders who want a tax-free transaction. The class B shares are currently traded at around $3,400 per share, the class A at over $100,000.
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