Renowned American investor Warren Buffett’s Berkshire Hathaway Company has no intention of acquiring a rival railroad company.
In an interview with CNBC on Monday, August 25th, Buffett revealed that earlier this month he met with the CEO of the railroad company CSX to discuss potential collaborations, clarifying that he does not plan to acquire CSX. A spokesperson for Berkshire Hathaway confirmed this statement.
Buffett mentioned that the purpose of his meeting with CSX’s CEO was to discuss ways to enhance the efficiency of freight railway transportation.
On August 3rd, Buffett, Chairman of Berkshire Hathaway, and the incoming CEO Greg Abel, met with CSX’s CEO Joseph Hinrichs in a private meeting in their office in Omaha, Nebraska, without any consultants present.
During the meeting, Buffett made it clear to Hinrichs that there would be no acquisition offer for CSX but expressed a belief that both companies could benefit from strengthening their cooperation and generating new revenue streams.
The news of Buffett’s lack of interest in acquiring a railroad company led to a collective decline in railroad stocks. CSX’s share price fell by approximately 5% to $32.81 per share on Monday. Union Pacific Corporation and Norfolk Southern Corporation also experienced declines of around 2%, while Berkshire Hathaway saw a less than 1% decrease in its stock price.
Prior to Buffett’s comments on Monday, BNSF Railway, a subsidiary of Berkshire Hathaway, and CSX had announced a collaboration on Friday, the 22nd, to provide a new transcontinental railroad service. This collaboration aims to enhance the efficiency of freight transportation within the United States without BNSF needing to pay a premium to acquire CSX.
In July, Union Pacific Corporation announced a plan to acquire Norfolk Southern Corporation for $85 billion, sparking speculation about Berkshire Hathaway potentially entering the acquisition battle and causing turbulence in the normally stable railroad stock market. As a result of this speculation, CSX’s stock price rose by 9% in July.