Warren Buffett, chief executive of Berkshire Hathaway, says the firm isn’t done snapping up big companies after last year’s deal to buy Burlington Northern Santa Fe for $44 billion.
The railroad should make a good investment for the next 50 to 100 years, Buffet says.
“But I’d be very disappointed if in the next couple years we don’t do something big, or the next five years or who knows when,” he told Bloomberg.
As soon as the Burlington Northern transaction is done, Berkshire will look for another one, Buffett says. “I always figure there are bigger fish in the sea than have been pulled out.”
He expects a decent but not spectacular return from Burlington Northern.
“Because of the nature of the business, it shouldn’t produce a spectacular return any more than our electric utilities should,” Buffett said.
He points out that railroads are essential to society. “We should get a good return on the necessary capital investment, which will be huge over time,” Buffett said.
“They (trains) are the best way to move goods in tonnage. It’s vital to the country that we have a healthy railroad system that’s spending billions before the revenue comes in.”
While Buffett wants Berkshire to buy more companies, he’s not so pleased with Kraft’s deal to purchase Cadbury. Berkshire is Kraft’s biggest shareholder, and Buffett says it’s giving away too much.
But Panmure Gordon analyst Graham Jones disagrees. “Kraft has got a very good deal here,” he told Reuters.
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