Billionaire investing guru Warren Buffett's company, Berkshire Hathaway, said Tuesday that it is buying railroad operator Burlington Northern Santa Fe Corporation (BNI) for about $32 billion.
Berkshire already owns around 22% of the Fort Worth, Texas-based company, and will now buy the remaining shares for $100 per share in cash and stock. That price represents a 31.5% premium over BNI's Monday closing price of $76.07.
The deal, which has been approved by the boards of both companies, would mark the largest acquisition ever for Berkshire Hathaway, the giant holding company which owns such big-name brands as GEICO insurance, Dairy Queen, and Fruit of the Loom.
Burlington Northern shares skyrocketed $21.47, or +28%, in morning trading Tuesday.
The Bottom Line
The company has a dividend yield of 2.10%, based on last night's closing stock price of $76.07. We would look at the other railroad plays at this point for better investment choices.
Burlington Northern Santa Fe Corporation (BNI) is not recommended at this time, holding a Dividend.com DARS Rating of 3.4 out of 5 stars.
