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Berkshire Hathaway To Acquire Burlington Northern Santa Fe

The transaction is valued around $44 billion including $10 billion of outstanding BNSF debt

Berkshire Hathaway’s boards of directors and Burlington Northern Santa Fe have entered into a definitive agreement for Berkshire Hathaway to acquire for $100 per share in cash and stock the remaining 77.4% of outstanding BNI shares not currently owned to increase its holdings to 100%.

The company said that Based on the number of outstanding BNI shares (including shares currently owned by Berkshire) on November 2, 2009, the transaction is valued at approximately $44 billion, including $10 billion of outstanding BNSF debt.

The transaction requires approval by holders of two-thirds of BNI’s outstanding shares (other than shares held by Berkshire Hathaway), and customary closing conditions, including Department of Justice review. BNSF Railway company will continue to focus on providing service to its customers from its Fort Worth, TX, headquarters. Included in the transaction are all assets and subsidiaries of BNSF.

Goldman, Sachs & Co. and Evercore Partners, acted as financial advisors to BNSF and the company’s legal counsel is Cravath Swaine & Moore, Berkshire Hathaway’s transaction counsel is Munger, Tolles & Olson.

Warren Buffett, chairman and CEO of Berkshire Hathaway, said: “Our country’s future prosperity depends on its having an efficient and well-maintained rail system. Conversely, America must grow and prosper for railroads to do well. Berkshire’s $34 billion investment in BNSF is a huge bet on that company, CEO Matt Rose and his team, and the railroad industry.

Matthew Rose, chairman, president and CEO of Burlington Northern Santa Fe, said: “We are thrilled to have the opportunity to become a part of the Berkshire Hathaway family. We admire Warren’s leadership philosophy supporting long-term investment that will allow BNSF to focus on future needs of our railroad, our customers and the U.S. transportation infrastructure. This transaction offers compelling value to our shareholders and is in the best interests of all of our constituents including our customers and employees.”

The transaction is expected to close during the first quarter of 2010.