Berkshire Hathaway Inc.’s energy unit won Canadian approval for its planned purchase of SNC-Lavalin Group Inc.’s AltaLink electric transmission business after committing to reinvesting in the country. The subsidiary of Warren Buffett’s Berkshire has agreed to maintain AltaLink’s staffing and keep the company’s headquarters and senior management in Alberta, Industry Minister James Moore said in a statement yesterday. Berkshire Hathaway Energy also promised to reinvest all of AltaLink’s earnings back into the company or elsewhere in Canada for at least five years.
The transaction is expected to be formally completed in late 2014 or early 2015. Altalink Press Release; Berkshire Hathaway Energy Press Release.
Buffett faces end of $255m a year dividend cheque (New Zealand Herald)
Dow Chemical shares rallied past $53.72 on Wednesday for the first time in nine years. If they close above that price for 20 trading days in a 30-day window, the chemical maker can convert Buffett's $3 billion preferred stake into common stock. Swapping the shares would cut dividend payments that Dow has been paying since it turned to Buffett's Berkshire Hathaway to help finance a takeover in 2009 of Rohm & Haas. [...] The preferred stake is particularly expensive for the chemical maker with interest rates now near record lows. The securities have an 8.5 per cent yield, entitling Berkshire to $255 million in dividends annually.
US railways: Back on track (Financial Times - Free Registration Required)
Since 2011, all seven big Class I railroads in the US and Canada have been earning returns higher than their cost of capital – a modest achievement in most industries but a mark the US’s railroads had missed for the past 70 years. Rising traffic levels are letting railroads sweat their assets harder and work more efficiently. Matt Rose, executive chairman of BNSF, operator of the US’s second-biggest rail network, says the industry is in a “virtuous cycle”. “You make investments,” he says. “You make more money on that; you make more investments. That’s this virtuous cycle that nobody in the 1970s or 1980s thought was possible.”
This Man Will Not Destroy Warren Buffett's Empire Berkshire Hathaway Inc. (Fool Video)
Replacing Warren Buffett atop Berkshire Hathaway will be no easy task once the 83-year old billionaire is out of the picture. While debate rages on over who should replace the Oracle of Omaha as CEO, Buffett has made it clear that he'd like to see his son, Howard, step as a non-executive chairman of the board. Will this mark the beginning of the end of Berkshire Hathaway's greatness?
Geico's gecko ain't cheap: Top 10 insurance advertisers (Insurance Business)
Geico spent more money on advertising than any other insurance company in the U.S, expending a whopping $935.1 million in 2013 alone, according to Nomura. The second biggest advertiser was Allstate Corp., who had a budget of $654.8 million - about $280 million less than Geico. [...] “Berkshire Hathaway’s auto-insurance company Geico has been a growth machine in recent years and the advertising data show just how important good advertising is to growth,” said Nomura. Geico enjoyed 11.2% growth in personal lines in 2013, which is slightly over the 2% growth rate it experienced the previous year.
Major Brands To Acquire Fellow Missouri Wholesaler MoBev (Shanken News Daily)
Missouri-based spirits and wine wholesaler Major Brands has agreed to acquire local rival Missouri Beverage Co. (MoBev) for an undisclosed sum. The deal is expected to close this fall. MoBev, with 2013 sales of around $20 million, is minority-owned by Wirtz Beverage and McLane Co., the latter of which is owned by Warren Buffett’s Berkshire Hathaway firm.
BNSF train carrying North Dakota oil derails in Seattle (Yahoo/Reuters)
A Burlington Northern Santa Fe train carrying crude oil derailed as it left a railyard in north Seattle on Thursday, but there were no reports of a spill or injuries, BNSF said in a statement. Four railcars came off the tracks at around 2 a.m. PDT, three of which were carrying crude oil, said BNSF, which is owned by Berkshire Hathaway. The train originated in North Dakota and was bound for Tesoro Corp's 120,000 barrel-per-day Anacortes oil refinery, 80 miles north of the city, Tesoro confirmed. The derailment comes at a pivotal moment for the booming crude-by-rail industry, which has come under intense scrutiny after a series of accidents over the past 18 months.
Berkshire Unit Needn't Arbitrate Asbestos Coverage Rows (Law360)
A New York federal judge has refused to force a Berkshire Hathaway Inc. subsidiary to arbitrate disputes under Transatlantic Reinsurance Co.'s reinsurance agreements covering American International Group Inc. insurers' asbestos liabilities. U.S. District Judge Edgardo Ramos on Tuesday sided with Berkshire's National Indemnity Co. and denied TransRe's arbitration petition [...] The more than 40 treaties at issue provided reinsurance coverage to AIG for policies dated from 1978 through 1985. While NICO did not sign any of the treaties, it purportedly replaced AIG as a party through loss portfolio transfers, according to TransRe's petition. [...] According to NICO, its agreements with the AIG insurers were for typical services provided by third-party administrators that help insurers collect reinsurance.
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