Warren Buffett Rules Out Further Railroad Acquisitions for Berkshire Hathaway

Berkshire Hathaway CEO Warren Buffett says the company has no plans to acquire another railroad, despite speculation following Union Pacific's purchase of Norfolk Southern. Buffett met with CSX CEO Joseph Hinrichs to discuss cooperation and efficiency, but ruled out a bid for CSX. Berkshire Hathaway owns BNSF Railway and recently partnered with CSX to provide new rail services.

Warren Buffett, the CEO of Berkshire Hathaway, has dispelled rumors of a potential acquisition of CSX by Berkshire Hathaway. In a meeting with CSX CEO Joseph Hinrichs, Buffett confirmed that Berkshire Hathaway has no plans to acquire another railroad, despite speculation following Union Pacific's $85 billion purchase of Norfolk Southern [1].

The Berkshire Hathaway Chairman met with Hinrichs earlier this month to discuss potential cooperation between BNSF and CSX. Instead of pursuing a merger, the two companies announced a partnership to provide coast-to-coast freight services, enhancing efficiency without the complexities and regulatory hurdles associated with a merger [2]. This strategic move allows BNSF and CSX to benefit from extended connectivity while sidestepping acquisition premiums.

Buffett's remarks ended weeks of speculation that Berkshire's BNSF Railway might pursue a deal with CSX. The clarification hit CSX shares, which dropped more than 4%, while other rail stocks like Union Pacific and Norfolk Southern also declined [3]. The market pullback reflects the dashed hopes of consolidation among investors.

Activist investor Ancora Holdings has urged CSX to explore strategic alternatives, including mergers with BNSF or Canadian Pacific Kansas City, warning that CSX risks lagging behind rivals by waiting for Berkshire to initiate major moves [2]. CSX welcomed the opportunity to enhance shareholder value and appreciated the input from its investors.

Despite the dip in CSX shares, Berkshire Hathaway's long-term stock performance remains robust. The company's year-to-date return stands at 7.08%, trailing the S&P 500's 9.65%. Over one year, BRK-B has gained 7.06% compared to the index's 14.46%. Across three years, Berkshire has delivered 62.81% returns versus 53.58% for the S&P 500. Its five-year return of 127.51% also outpaces the benchmark's 87.28%, reflecting the strength of Berkshire's diverse portfolio [3].

References:
[1] https://sherwood.news/markets/warren-buffett-not-buying-csx/
[2] https://www.investing.com/news/stock-market-news/ancora-urges-csx-to-pursue-merger-or-replace-ceo-amid-rail-industry-shakeup-4200661
[3] https://parameter.io/berkshire-hathaway-inc-brk-b-stock-buffett-rules-out-railroad-merger/