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In the history of surprising mergers and acquisition yet another story has been added, about Berkshire Hathaway (BRK)’s acquisition of Burlington Northern (BNI) and shipping/transport stocks. I surely think you must have heard of it by now. Or, you can certainly visit the link mentioned here for detailed information: After BNI, what’s next for Buffett / BRK? .

But in a nut shell, a somewhat surprising acquisition was made by the super investor Warren Buffett and his investment company (BRK), by acquiring BNI. Burlington Northern (BNI) is a railroad stock which was already being held by BRK as a minority. What we can say as of now about this acquisition is that no matter what Warren does as a business move is considered as a smart move by the other investors. Thus there is a lot of buzz around this acquisition at the moment.

Warren Buffett has been increasing his energy plays in recent years, both in the U.S. and abroad. He has said repeatedly that he likes energy and power. His chief asset in the U.S. is Mid-American Energy, a major utility company whose CEO is often touted as one of the eventual successors to Buffett at the helm of Berkshire.

Here is some facts on Burlington Northern and the U.S. railroad industry generally. This old-fashioned form of transportation has been modernized in recent years, with more-efficient trains, fewer employees and higher profit margins.

The industry also bills itself as a more ecofriendly transportation alternative to the congested and outdated highway system. Everything about this deal is big–from the price tag (Buffett’s largest ever) to the scale of the company’s business.

Rail accounts for 43% of the freight hauled across the U.S.

Burlington Northern route miles: 32,000, enough to crisscross the U.S. about 10 times. On average, the company has 220,000 freight cars chugging at one time.

It is quiet understandable that a lot of you are fans of the transportation industry and the same is reflected in the trading volumes of Dryships (DRYS) and some other transport related stocks. But the good question is what makes the deal so good. To answer that I would start with “Green”,  the American legislation that is about to hit the trucking on the American roads hard. While on the other hand the RR’s are very much fuel efficient, compared to the trucks running around.

But in case you ask me what’s the flip side of the story? Then I would have to say that BNI currently hauls primarily coal as of now. So what that means is presently we have domestic fossil fuel wrapped up well in a green wrapper. Having that heard whether to love or hate the deal is certainly your choice, and never the less but is an issue inviting and open enough for a good debate on it. But to me as of now the deal stands to be profitable, from where I happen to see it. Post the deal, many are turning with hopes towards the Dow Jones Transportation related index. The ray of hope looks like coming out from GATX, CSX, and the Union Pacific (UNP).

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