---
title: "Berkshire Hathaway → Burlington Northern Santa Fe"
url: "https://mahouse.world/ma-deals/berkshire-hathaway-buy-burlington-northern-santa-fe-2009"
type: "M&A deal"
year: "2009"
---

# Berkshire Hathaway → Burlington Northern Santa Fe

Berkshire Hathaway's largest acquisition: $100 a share in cash and stock for the 77.4% of the BNSF railroad it did not already own, about $44bn including $10bn of debt, which Warren Buffett called "an all-in wager on the economic future of the United States".

Berkshire's largest acquisition, taking full ownership of the railway including debt assumed.

- **Acquirer:** Berkshire Hathaway (United States)
- **Target:** Burlington Northern Santa Fe (United States)
- **Value:** $44B
- **Announced:** November 2009
- **Completed:** February 2010
- **Sector:** Transport
- **Deal type:** acquisition

## Why it mattered

Berkshire had been buying BNSF shares in the market: it held 10.9% by April 2007 and 22.5% by the end of 2009. The agreement announced on 3 November 2009 let BNSF shareholders elect $100 in cash or Berkshire shares, prorated to about 60% cash and 40% stock. It needed the approval of two-thirds of the shares Berkshire did not hold and a Justice Department review, and closed on 12 February 2010, making BNSF a wholly owned subsidiary that kept its Fort Worth headquarters.

Buffett was open about the cost. The deal required about 95,000 new Berkshire shares, 6.1% of those outstanding, and he wrote that he enjoyed issuing stock "about as much as we relish prepping for a colonoscopy". Because Berkshire's existing stake had been bought for cash, only about 30% of its total cost was paid in shares; what tipped a decision he called "a close one" was the chance to put $22bn of cash into a business he understood and meant to keep. As part of the deal Berkshire split its Class B shares 50-for-1 in January 2010, and the extra liquidity brought it into the S&P 500.

## What it left behind

BNSF became one of Berkshire's two largest non-insurance businesses, earning $5.0bn after tax in 2024. But Buffett had warned that railways, like utilities, would need investment well above depreciation for decades, and by 2023 the excess had reached $22bn, which is why, he wrote, dividends to Berkshire fall well short of reported earnings and the return on the purchase price is "acceptable" but "less than it might appear". Greg Abel, now chief executive, reported that in 2025 BNSF generated $8.1bn of operating cash flow, paid Berkshire $4.4bn in dividends and raised its operating margin to 34.5%, still short of the industry's best. As of September 2026 the railway is on the defensive side of consolidation: it has joined the coalition opposing Union Pacific's proposed $85bn purchase of Norfolk Southern, which awaits a Surface Transportation Board decision expected in 2027, and Berkshire has said it does not want to buy another Class I railroad. It is the model for buying an irreplaceable asset with permanent capital: the case rests on replacement value, the return on what the asset pays out after its capital needs.

Source: https://www.berkshirehathaway.com/news/nov0309.pdf