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Finance & Accounting
Pages 4 (1004 words)
Berkshire Hathaway: Case Study (Name) (Tutor’s Name) (Date) 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.
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). ...
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