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Text size [+][-]  Friday November 20 2009GLOBAL EDITION

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03 Nov 2009 20:56

Building steam?



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Warren Buffett's Berkshire Hathaway said on November 3 it had agreed to buy the 77.4% of Burlington Northern Santa Fe it didn’t already own for $100 a share in cash and stock, a 31% premium over the closing share price on November 2.

The deal values Burlington’s equity at about $34bn, and also includes the assumption of $10bn of debt.

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He’s paying a big premium to swallow Burlington Northern Santa Fe, a US railroad operator. It’s not necessarily a signal to buy the sector in a hurry. But the Berkshire Hathaway chairman does seem to think rail transport could be building a bit of a head of steam.

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