Legality of BNSF's Acquisition by Berkshire Questioned

By CnAgri2012-10-19 20:12:47 Print

The legality of Berkshire Hathaway's acquisition of BNSF Railway has been called into question following the discovery that Berkshire owned short-line railroads in Oregon and Iowa before the transaction.

Ownership of these assets means Berkshire needed approval by the Surface Transportation Board before it purchased BNSF in 2010, which it did not receive.

BNSF has acknowledged that the acquisition should have been subject to the STB's authority and has said the company will sell both railroads by the end of year and provide progress reports to the STB every 30 days. BNSF believes legislators' calls for regulatory action on the issue are an 'unnecessary overreach and a waste of taxpayer dollars.'

A separate concern for rail customers is the $8 billion acquisition premium paid by Berkshire when it bought the railroad and whether or not BNSF will raise rates to compensate for that premium.

The STB has issued a notice requesting public comments on the BNSF acquisition by Nov. 8.