Insurance Underwriter & Coal - Mergers and Acquisitions
| Buffett discusses rationale for railroad deal, stock component |  |
November 04, 2009 6:42 PM ET
By Jacob Geiger
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Berkshire Hathaway Inc. Chairman and CEO Warren Buffett admitted in an interview with Fox Business that he is generally "not enthused" about issuing stock for deals but said his acquisition of Burlington Northern Santa Fe Corp. will mostly involve cash, especially since Berkshire already held a stake in Burlington Northern. Buffett made the statements in a Nov. 3 interview, a transcript of which the company filed Nov. 4 with the SEC. Buffett did not express concern about the impact of a cap-and-trade bill regulating carbon emissions on the business of the railroad, which in 2008 hauled 297 million tons of coal, or about 25% of the nation's coal production that year. "It won't change the composition of what utilities are doing tomorrow or next week or next year. … Over time, coal is going to diminish somewhat," he said. "Now, I think that will hit Eastern coal more than Western coal, but that's a fact of life over a considerable period of time." The Berkshire CEO said he believes rail transport will have an advantage over truck and air transport in the future because "it is a very, very efficient, effective environmentally friendly way of moving freight." He also told the network that he was not worried about moves by some shipping companies to lobby for re-regulating the railroads, saying he thinks "people will see the rails for what they are … as an outstanding way to be moving freight around the country." | 
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