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US billionaire investor Warren Buffett has unveiled a deal to take over Burlington Northern Santa Fe, one of the largest rail operators in North America, calling it a huge bet on the future of the US economy.
Buffett's Berkshire Hathaway holding group on Tuesday announced it would purchase the 77.4 per cent of Burlington Northern Santa Fe (BNSF) that it does not currently own for $US100 per share in cash and stock.
The offer values the rail operator at $US44 billion ($A48.62 billion), including $US10 billion in debt.
Buffett will invest some $US26.3 billion for the new stake.
"It's an all-in wager on the economic future of the United States. I love these bets," said Buffett, known in financial circles as the Oracle of Omaha, for his investing acumen.
The takeover bid represents a 31 per cent premium over Benthos closing share price Monday.
"Our country's future prosperity depends on its having an efficient and well-maintained rail system," said Buffett, Berkshire Hathaway's chairman and chief executive, adding that the deal was the biggest ever for his storied investment fund.
"America must grow and prosper for railroads to do well," Buffett said, adding that "the investment in BNSF is a huge bet on that company... and the railroad industry."
Burlington Northern president, chairman and CEO Matthew Rose said the company welcomed deal.
"We are thrilled to have the opportunity to become a part of the Berkshire Hathaway family," said Rose.
The deal requires approval by holders of two-thirds of the railway's shares not already held by Berkshire Hathaway and Department of Justice review.
The transaction is expected to be completed in the first quarter of next year.
Burlington Northern, a 150-year-old firm, operates some 51,000 kilometres in 28 states and two Canadian provinces. It is a major transporter of grain, coal and other freight.
Based in Fort Worth, Texas, it has 40,000 employees and 6,700 locomotives. It earned a profit last year of $US3.9 billion on $US18 billion in revenues.
Buffett, 79, one of the world's richest individuals, was ranked number two this year by Forbes magazine behind Microsoft founder Bill Gates among the wealthiest billionaires.
Berkshire Hathaway lost $US1.5 billion ($A1.66 billion) in the first quarter of 2009 amid market turmoil and the value of its assets fell by $US6.1 billion ($A6.74 billion).
The firm posted a net profit of $US4.99 billion ($A5.51 billion) for 2008, despite a deepening US recession and a global economic and financial crisis.
© 2009 AFP
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