Posted Wednesday, Feb. 10, 2010
Shortly after 9 a.m. today, Burlington Northern Corp., the parent company of the vast BNSF Railway Co., will become a part of the Warren Buffett empire.
That's when the formal shareholder vote on the proposed $26.3 billion acquisition of Burlington Northern by Buffett's Berkshire Hathaway will take place at BNSF headquarters.
Approval of the deal, in which Berkshire is paying $100 a share in cash and stock, should be little more than a legal formality.
"It won't be a very long meeting," said John Ambler, vice president of corporate relations for BNSF.
It should be business as usual afterward, Ambler said. Buffett is not expected to make an appearance, and no ceremonies or other events are scheduled. BNSF CEO Matt Rose is planning to hold a brief news conference.
The deal, announced Nov. 3 by the two companies, marks the end of the line for BNSF as an independent, publicly held corporation.
But when the deal was announced, Buffett and Rose said the sale will have little effect on the way the railroad operates and its Fort Worth presence. Rose said his instructions from Buffett were "to run this business like a 100-year family business and try to make it better every day."
Buffett has described his decision to acquire BNSF as "an all-in bet" on the railroad "and the economic future of the United States."
"It's an absolutely essential business that will prosper as America prospers," Buffett said. "Matt Rose and his team have done a wonderful job of running that company. They're an extremely well-run railroad."
Buffett said he's optimistic about the growth prospects of railroads because of the low cost and high energy efficiency they provide in moving heavy raw materials and industrial goods.
Burlington Northern earned $1.7 billion on revenue of $14 billion in 2009. The railroad employs about 38,000 people across the country, including about 3,300 in the Fort Worth area.
Numerous lawsuits challenging the merger on grounds that the price was inadequate were filed within days of the deal's announcement. But Buffett said he would not increase his offer, and the litigation was settled after BNSF and Buffett made further disclosures of the terms.
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