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BUSINESS: Burlington Northern Santa Fe Railway Tracks a New Owner

Warren Buffett Buys Second Largest Railroad in US

By Michael P. Neufeld
Wednesday, November 4, 2009

New York, NY - The Burlington Northern Santa Fe (BNSF) trains that make their way through the Cajon Pass are on track for new ownership.

A Burlington Northern Santa Fe train makes its way through the Cajon Pass section of the Southern Transcom that runs from Los Angeles to Chicago. (Photo by Michael P. Neufeld.)

Warren Buffett's Berkshire Hathaway investment company has announced his firm will spend $34 billion to acquire 74 percent of the second largest railroad in the United States.

Berkshire Hathaway will pay $100 per share in cash and stock for the BNSF stock, more than a 30 percent premium on the closing price on BNSF stock on Monday. BNSF shareholders will have the option of a $100 cash payment per share or common stock in Berkshire Hathaway.

Warren Buffett heads the Berkshire Hathaway investment company that just purchased Burlington Northern Santa Fe Corp. (Photo by Creative Commons.)

"Our country's future prosperity depends on its having an efficient and well-maintained rail system," Buffett, Berkshire Hathaway chairman and chief executive officer stated. "Conversely, America must grow and prosper for railroads to do well."

The boards of both companies have already approved the acquisition.

SOUTHERN TRANSCOM

BNSF trains make their way through the Cajon Pass on what is known as the Southern Transcom, a fast intermodal corridor connecting Southern California and Chicago.

Most traffic going through the Cajon Pass is either trailers or containers from the Ports of Los Angeles and Long Beach.

The typical train starts its trip East on the three-track Alameda Corridor, shared with Union Pacific Railroad, and then heads out of Los Angeles on BNSF rails. The route now includes almost completely double-tracks and in areas like the Cajon Pass triple-tracking has been constructed.

The Inland Empire is also home to BNSF's transload facility in Fontana, near the California Speedway. The complex opened in 2006.

This article was first published on Tuesday, November 3, 2009 at 8:20 pm. This article has been viewed 953 times.

Michael P. Neufeld, Senior News Editor, is a graduate of the Dwight Bentel School of Journalism at San Jose State University. His first job out of San Jose State was with the Associated Press in Los Angeles as overnight Radio Editor. Prior to joining RIMOFTHEWORLD.net, Neufeld was editor of two weekly newspapers—THE MOUNTAIN NEWS and CRESTLINE COURIER-NEWS. He also has experience as editor of an employee newspaper for a major utility company and during his tenure as executive director of the San Jose State University Alumni Association served as faculty advisor to the association's monthly newsletter. He also spent eight years in commercial radio doing everything from news to advertising sales and writing commercials to being an announcer and on-air personality. Neufeld is actively involved the mountain communities including serving as master of ceremonies for the Arrowhead Arts Music Festival held each summer.

The views expressed in this article do not necessarily reflect those of RIMOFTHEWORLD.net. This column is copyrighted by Michael P. Neufeld.