StudentShare solutions
Triangle menu

Berkshire Hathaway Case - Research Paper Example

Not dowloaded yet

Extract of sample
Berkshire Hathaway Case

As a result of this strategy, Berkshire Hathaway currently owns a diverse range of business organizations including home furnishings, retail, jewelry sales, uniforms sales, confectionary, and manufacturing of vacuum cleaners. As stated in the annual report (Berkshire Hathaway 2011 annual report, 2011), recently, on 12th February 2010, Berkshire Hathaway completed the acquisition of BNSF by purchasing the remaining 77.5% of BNSF common stock, and currently, BNSF is a wholly owned subsidiary of Berkshire Hathaway Inc. This paper will analyze the reasons for the BNSF acquisition and the principles relating to the finance course. BNSF acquisition The BNSF is North America’s ‘second largest freight railroad network’ and one of the seven Class I railroads (BNSF Railway, n.d.). On 3rd November 2009, Berkshire Hathaway announced that the company would acquire BNSF’s remaining 77.4% stocks that Berkshire Hathaway had not owned at that time. This deal was estimated at $44 billion, making it the largest acquisition in the history of the Berkshire Hathaway. Buffett “agreed to buy Burlington for $34 billion or 100 a share” and “is also taking on about $10 billion of Burlington debt” (Morcroft & Barr, 2009). ...
Referring to corporate press releases, the company is currently one of the North America’s leading intermodal freight transporters. In the context of the current economic environment, Buffet believes that this acquisition would contribute to the future growth of the company. He says that “our country’s future prosperity depends on its having an efficient and well-maintained rail system;” he adds that “conversely, America must grow and prosper for railroads to do well” (BNSF, Berkshire Hathaway Inc, n.d.). Buffett’s observation is based on the common fact that infrastructure development is a key element of an economy’s overall development. As Morcroft and Barr (2009) point out, through this acquisition, Buffett has invested in a business which is highly sensitive to a possible economic recovery in the United States. It is clear that the US has not yet completely recovered from the shock of the recent global recession. In this economic environment, railway transportation can be an area that would promote its operations despite the impacts of the recession. Economists predict that BNSF would perform better and contribute to the expansion of Berkshire Hathaway once the economy is recovered. Some recent reports justify the decision of Warren Buffett. In November 2012, the Berkshire Hathaway announced its third quarter operating results. As per the company reports (as cited in Miller, 2012), a combined total of revenues of three segments (railroad, utilities, and energy) increased by 7.5% and reached $8.4 billion as compared to the same period a year ago; the report also indicates that BNSF contributed nearly 63% to this combined ...Show more

Summary

Berkshire Hathaway: Case Study Berkshire Hathaway: Case Study Introduction Berkshire Hathaway Inc. is an American multinational corporation that regulates a number of subsidiary companies. The company achieved an average annual growth of 20.3% (book value) for its stockholder for the past 44 years…
Author : katlynn86
Berkshire Hathaway Case essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the research paper on your topic
"Berkshire Hathaway Case"
with a personal 20% discount.
Grab the best paper

Related Essays

IMC Plan On Geico Insurance Company
The purpose of this paper is to evaluate and present IMC plan on Geico insurance company. The research will start with the organization background of the company; analysis of promotional program situation; analysis of communication process; budget determination; IMC program; tactics & integration.
13 pages (3250 words) Research Paper
The Value Investing Approach ( Banjamin Graham )
From the research it can be comprehended that Benjamin Graham did suggest that when it comes to picking stock, one should use a more defensive investment approach to stock trading as when they are below their tangible value, they are safe against any adverse future developments which often occur in the stock markets
12 pages (3000 words) Research Paper
Warren Buffett and His Proven Strategies for Investing
He is the CEO, chairman and the primary shareholder of Berkshire Hathaway. He has been regularly ranked amongst the world’s richest people. In 2008, he was given the tag of the world’s richest man. In 2011, he ranked third as the world’s richest man.
8 pages (2000 words) Research Paper
BUSINESS FINANCE
Rajaratnam is Sri Lankan who was born in Colombo, Ceylon. He earned an MBA degree from Wharton school (Pennsylvania University) and maintains residence in Connecticut, New York, Florida and George Town.
9 pages (2250 words) Research Paper
Business Research and Writing
Company G is one such organization that has considered expanding the business geographically. With the introduction of ChargeOn, a special water-resistant charger that charges mobile phones and smartphones completely in 30 minutes, Company G aims to cater the needs of customers in the Canadian consumer electronics market.
12 pages (3000 words) Research Paper
Dax's Case
More importantly, Ada believed that God wanted her son to live and to fulfill his responsibilities to Him. And she clung to the belief that if God really wanted his son to die
5 pages (1250 words) Research Paper
How well does insurance contract regulation work
There are two parties involved, the insurer which is the insurance company proffering or selling the insurance and the insured, widely known as policyholder, an entity or a person buying the insurance policy. The payment settled out for the insurance policy according to the
10 pages (2500 words) Research Paper
Woody Case
The design will be that of expanding the floor. Since the team will increase the floor by 26% of the original, it follows that they
2 pages (500 words) Research Paper
Case
Management styles are tied with the very existence of a given company in terms of its daily operations. More often than not, management and leadership somehow go hand in hand. Management is about working with people while leadership is about giving direction and making
8 pages (2000 words) Research Paper
Case
The introduction of the Sarbanes-Oxley impacts the U.S capital markets, in terms of costs. Many companies have to incur higher costs in hiring and paying auditors. The requirements of the Sarbanes-Oxley related to non-audit services can
2 pages (500 words) Research Paper
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation