NEW YORK — The biggest name in investing is making what he calls an “all-in wager” on the U.S. economy — $26.3 billion to own a railroad that hauls everything from corn to cars across the country.
The acquisition of Burlington Northern Santa Fe, the nation’s second-largest railroad, would be the biggest ever for Warren Buffett’s Berkshire Hathaway investment company.
It’s a natural fit for the Oracle of Omaha, a city with a special place in railroad history. It was the starting point for the westward push of the transcontinental railroad. Today, Omaha is the headquarters of Union Pacific, and BNSF trains rumble through every day.
In a statement, Buffett, whose investing decisions are carefully scrutinized by the world of finance, voiced confidence in the railroad industry.
“Most important of all, however, it’s an all-in wager on the economic future of the United States. I love these bets,” he said Tuesday.
Berkshire Hathaway owns a 22 percent stake in Burlington Northern and would buy the rest in the deal. It needs approval from Burlington shareholders and antitrust regulators, expected next year.
Berkshire Hathaway also announced plans to split its Class B shares 50 for 1 to facilitate the purchase. Given that the B shares were trading recently at just over $3,300, the post-split price would be about $66.
Such a change would make a big difference for retail investors who want in on Berkshire shares. Even the Class B shares, created in 1996 and structured to cost about 3.3 percent of the price of Class A shares, are out of reach for many.
