US trio on track for Warren Buffett's $34bn railway buyout
A trio of US firms have taken lead roles on Berkshire Hathaway's $34bn (£20.6bn) acquisition of a 77% stake in railroad operator Burlington Northern Santa Fe (BNSF), writes the Am Law Daily. Berkshire, the holding company for the assets of Warren Buffett, the world's second-richest man, already owns the other 23%.
November 04, 2009 at 07:34 AM
2 minute read
A trio of US firms have taken lead roles on Berkshire Hathaway's $34bn (£20.6bn) acquisition of a 77% stake in railway operator Burlington Northern Santa Fe (BNSF), writes the Am Law Daily.
Berkshire, the holding company for the assets of Warren Buffett, the world's second-richest man, already owns the other 23%.
Cravath Swaine & Moore, Sullivan & Cromwell and Munger Tolles & Olson all worked on the deal, which is the largest in Berkshire's history.
Cravath advised BNSF with a team including corporate partners Scott Barshay, George Zobitz and Damien Zoubek, head of executive compensation and benefits Eric Hilfers, tax partner Michael Schler and antitrust partner Elizabeth Grayer.
Berkshire turned to Munger Tolles corporate partner Robert Denham, who has a longstanding relationship with Buffett. Denham advised the multi-billionaire businessman last autumn when he invested $5bn (£3bn) in Goldman Sachs, helping the investment bank to survive the market maelstrom following the Lehman Brothers bankruptcy.
Munger Tolles has long been the go-to firm for Berkshire. Founding partner Charles Munger, who is no longer affiliated with the firm, is a Berkshire vice chairman and longtime confidant of Buffett. Besides Denham, the Munger Tolles team also included corporate partners Mary Ann Todd and Brett Rodda and tax partners Stephen Rose and David Goldman.
Sullivan & Cromwell advised BNSF's financial advisers. M&A partner Stephen Kotran advised Goldman Sachs and M&A partner George Sampas advised Evercore Partners, which BNSF hired as second financial adviser because of Berkshire's $5bn (£3bn) equity stake in Goldman.
The deal, which came together in only 10 days, will see Berkshire pay $16bn (£9.7bn) in cash – half from company coffers and the other half borrowed from banks – for the rest of BNSF. The remaining 40% of the acquisition is priced in stock. Including $10bn (£6bn) in BNSF debt, the total value of the transaction is $44bn.
Buffett hopes the transaction will do more than just add to Berkshire's bottom line. "It's an all-in wager on the economic future of the US," he said in a statement announcing the acquisition. "I love these bets."
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