It has recently come to our attention that the legality of Berkshire Hathaway’s purchase of Burlington Northern Santa Fe railroad has come into question. The problem – Berkshire Hathaway owned short line railroads in the states of Iowa and Oregon even before they made this transaction.
Since they owned these railroads prior to the purchase, Berkshire Hathaway would have needed approval by the Surface Transportation Board prior to buying Burlington Northern Santa Fe railroad. This purchase was made in 2010, and the STB did not receive notification so they never gave their approval.
Burlington Northern Santa Fe railroad has acknowledged that the purchase of the railroad should have been put under the STB’s authority. Because of this, the company said that they plan to sell both railroads by the end of 2012, and they will give a monthly update to the STB. BNSF said that they believe that legislators’ calls for regulatory action regarding this issue are an “unnecessary overreach and a waste of taxpayer dollars.”
A different concern for the railroad customers is that Berkshire Hathaway paid a premium of 8,000,000,000 dollars to purchase this railroad. So the customers have to wonder whether or not Burlington Northern Santa Fe plans to raise their prices in order to pay for this premium.
The Surface Transportation Board issued a notice asking for public comments in regards to the Burlington Northern Santa Fe acquisition by the date of November 8, 2012.