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Rail News: BNSF Railway

Berkshire Hathaway to sell UP, NS shares prior to BNSF buyout

Berkshire Hathaway Inc.’s holdings in other Class Is won’t be an anti-trust consideration in the Burlington Northern Santa Fe Corp. deal now that Warren Buffet’s company plans to sell its shares of Norfolk Southern Corp. and Union Pacific Corp.

In a recent regulatory filing, Berkshire Hathaway said it would sell its stakes in the two Class Is, which are worth more than $690 million. As of June 30, the company held 9.5 million shares of UP stock and 1.9 million shares of NS stock — representing 2 percent of UP’s and less than 1 percent of NS’ shares. The sale is expected to take place before Berkshire Hathaway closes the BNSF buyout in first-quarter 2010.

Several analysts previously speculated that the BNSF deal would pass anti-trust muster despite Berkshire Hathaway’s minor UP and NS holdings.

Meanwhile, a group of BNSF investors late last week filed a lawsuit in a Texas court against Berkshire Hathaway and the Class I claiming the deal wouldn’t maximize shareholder value. The parties didn’t provide shareholders with sufficient information to enable them to determine whether to tender their shares for the merger agreement, the investors claim.

Contact Progressive Railroading editorial staff.

More News from 11/10/2009