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Berkshire Acquires 10.9% Stake in Burlington Northern

Warren Buffett's Berkshire Hathaway said it has acquired a 10.9% stake in Burlington Northern Santa Fe, becoming the railroad company's largest shareholder.

Berkshire owned 39,027,430 shares of Burlington Northern with a market value of $3.23 billion as of April 5, according to a Friday filing with the U.S. Securities and Exchange Commission. Prior to Friday, Berkshire had not disclosed a stake in the second-largest U.S. railroad.

It wasn't immediately clear why Berkshire amassed the stake. Berkshire and Burlington Northern did not immediately return calls seeking comment.

Buffett, in his February 28 letter to Berkshire shareholders, named 17 companies in which Omaha, Nebraska-based Berkshire owned at least $700 million of common stock.

He declined at the time to itemize two other companies in which Berkshire owned $1.9 billion of stock "because we continue to buy them. I could, of course, tell you their names. But then I would have to kill you." Berkshire's total common stock investments totaled $61.5 billion at year end.

Shares of companies often get a boost when Berkshire discloses investment stakes.

Earlier this year, Korean steelmaker POSCO rose 3.1%, British retailer Tesco 2.1% and health insurer UnitedHealth Group 3.8% on their first respective trading days after Berkshire revealed sizable stakes.

Burlington Northern said on Thursday first-quarter profit will be cut to about 96 cents per share because of $80 million of charges for environmental costs and the writeoff of a technology system.

Analysts on average had expected profit of $1.09 per share, according to Reuters Estimates. Burlington Northern shares closed Thursday at $82.72 on the New York Stock Exchange. The U.S. stock market was closed on Good Friday.

Berkshire's stake in Fort Worth, Texas-based Burlington Northern tops the 8.9% stake, or 32.04 million shares, that Marsico Capital Management held at year end, according to Thomson ShareWatch.

The SEC allows Buffett to often delay disclosing Berkshire's purchases so investors cannot try to mimic them.

According to SEC rules, Berkshire would have had to quickly disclose a 5% stake had Buffett intended to use it to influence Burlington Northern management. The rules require Berkshire to quickly disclose a 10% stake even if Berkshire plans to be a passive shareholder.

Berkshire in its annual report named five companies in which it held double-digit percentage stakes at year end: American Express, Moody's, USG, Washington Post and White Mountains Insurance Group. Its largest listed holding by market value, at $9.65 billion, was Coca-Cola.

Berkshire Class A shares closed Thursday at $108,849 on the Big Board, and its Class B shares closed at $3,626.