Berkshire Hathaway to sell stakes in Union Pacific, Norfolk Southern

November 10, 7:54 AMWarren Buffett ExaminerWilliam Freehling

Previous Next

Comment Print Email RSS Subscribe

Subscribe

Get alerts when there is a new article from the Warren Buffett Examiner. Read Examiner.com's terms of use.

Email Address   Include other special offers from Examiner.com Terms of Use

Berkshire Hathaway will sell its stake in railroads Norfolk Southern and Union Pacific before acquiring Burlington Northern Santa Fe Corp.

That's according to an SEC filing yesterday afternoon by BNSF.

BNSF CEO Matthew Rose told a group of Burlington employees on a conference call last Tuesday that Warren Buffett would be selling the Union Pacific and Norfolk Southern stakes before closing the BNSF deal.

Berkshire as of June 30 reported a stake in Union Pacific that is now worth about $600 million, and a $100 million stake in Norfolk Southern.

This certainly makes sense, of course, particularly the sale of Union Pacific, which is BNSF's primary competitor in the western U.S.

One question I still have about the BNSF deal -- from which bank is Berkshire borrowing the $8 billion it will use to finance half of the $16 billion cash portion of the $26 billion takeover price (Berkshire will use about $8 billion of its own cash and issue about $10 billion in stock)? My guess is Goldman Sachs, Wells Fargo or U.S. Bancorp, since Berkshire owns big stakes in each.