Page last updated at 17:25 GMT, Tuesday, 3 November 2009

Buffett in railroad buy-out deal

Warren Buffett
Warren Buffett is considered one of the world's greatest investors

Billionaire Warren Buffett's investment firm is to take control of the second-biggest US railroad, in what is said to be his biggest deal yet.

Berkshire Hathaway agreed to buy the 77.4% of Burlington Northern Santa Fe (BNSF) it does not already own for about $26bn (£16bn) in cash and stock.

BNSF is the biggest US haulier of products such as corn and coal.

Mr Buffett said that the deal was "an all-in wager on the economic future of the United States".

"I love these bets," he added.

Ships goods

Including past investment and the assumption of $10bn of BNSF debt, the deal is valued at $44bn.

The railroad also ships goods from western US ports including refrigerators, clothing and TVs.

Berkshire Hathaway already owns about 22% of BNSF and said it will pay $100 a share for the rest of the company.

The deal has been approved by the boards of both companies, but still needs backing from two-thirds of BNSF's shareholders.

The railroad expects to clear those hurdles in the first three months of next year.

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