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CSX’s Ward Calls Buffett’s Rail Purchase ‘Brilliant’

April 15, 2010 | About:
Warren Buffett’s purchase of Burlington Northern Santa Fe Corp. was a “brilliant” move as the U.S. rail industry rebounds, the chief executive officer of CSX Corp. said.

“We’ve been talking about the rail renaissance for a number of years,” CSX’s Michael Ward said today in an interview. “I think Mr. Buffett, after we talked about it for three or four years, finally agreed with us.”

Buffett’s Berkshire Hathaway Inc. in February completed its $26 billion purchase of Burlington Northern, which was the biggest U.S. railroad by revenue in 2008. In March, the industry reported its highest weekly freight volume since that year, according to the Association of American Railroads. Shipments are rising after more than two years of declines.

“We think he was brilliant,” said Ward, whose Jacksonville, Florida-based railroad operates mainly in the eastern U.S. while Burlington Northern is focused on the western half. Buffett’s acquisition is “a Good Housekeeping seal of approval” for the industry, the CEO said.

Finish reading the story at Businessweek.com.


Rating: 3.0/5 (9 votes)

Comments

dew_nay
Dew_nay - 7 years ago    Report SPAM
Thus far, it looks like WB got himself a decent (not a bargain though) deal. BNSF was done at a premium of 32% to its last traded price before the offer. Now look at where the price of the other rails are: 1) NSC up 28%, 2) CSX up 28%, 3) UNP up 40%, 4) CNI up 26%, & KSU up 50%. What's more, freight volume are improving, from CSX to UPS to JB Hunt.

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