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Berkshire deal under review
Published:November 6, 2009, 6:59 AM
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Updated: August 21, 2010, 2:54 AM
CHICAGO (AP)—Fitch Ratings warned Thursday that Berkshire Hathaway Inc.’s deal for Burlington Northern Santa Fe Corp. could overexpose Warren Buffett’s company to weaknesses in the economy at the expense of its more durable investments.
The agency put Berkshire Hathaway’s ratings under review for a possible downgrade in the wake of its announcement Tuesday that it will buy the rest of the railroad company based in Texas for $26.3 billion. Berkshire already owns a 22 percent stake in the railroad.
Another big ratings agency, Standard& Poor’s, placed its Berkshire ratings under review to see if a downgrade was in order Wednesday.
Fitch said the acquisition and Berkshire Hathaway’s investments in utilities, energy and finance companies are shifting its asset profile toward businesses that use more financial leverage. It says those investments are more sensitive to the economy than investments in insurance and holding companies. Berkshire owns The Buffalo News.
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