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World's second richest man sells EWS - buys US rail freight firms

Associated Press: 08.28.07
Joshua Lipton

Warren Buffett, the world's secondest richest man after Microsoft pioneer, Bill Gates, since agreeing the sale of EWS to Deutsche Bahn has continued to increase his stake in North American rail freight firms including Burlington Northern Santa Fe (BNSF).

All aboard at Berkshire Hathaway.

Warren Buffett's company reported that it has raised its stake in the railroad sector, buying up 10.1 million shares of Burlington Northern Santa Fe, increasing the firm's position in the railroad to nearly 14.8%.

In documents filed with the U.S. Securities and Exchange Commission, Berkshire showed it bought more than 4.3 million shares for $79.96 apiece on Aug. 23 and nearly 2.5 million shares for $79.97 on Aug. 24.

On Aug. 27, the company bought more than 3.3 million shares for $80 apiece.

Earlier in the month, Berkshire reported that it bought 2.5 million shares of the railroad. Berkshire's total stake is now 52.1 million shares.

Buffett has become a serious fan of the railroad industry, where his company has bought some sizable pieces of firms. In May, Berkshire revealed it owned 10.5 million shares of Union Pacific and nearly 6.4 million shares of Norfolk Southern.

In morning trading on Tuesday, shares of Burlington Northern Santa Fe increased 0.5%, or 37 cents, to $80.70.

Differentiating Burlington from its rivals is its transcontinental route from Los Angeles to Chicago, which is the shortest of all its competitors. Also, the company has a significant agricultural business, and not much exposure to the struggling automotive sector.

Buffett, the world's second-richest person, isn't the only investor curious about pushing cash into the railroad sector. Fortress Investment Group agreed to buy Florida East Cost Industries for $3.5 billion in May. Florida East is a regional rail freight hauler.