Commentary on Berkshire Retaining Goldman Sachs to Advise on a Possible Rail Merger

Commentary: It is extremely unusual for Berkshire to retain investment bankers to provide investment advice relating to a merger. Warren Buffett has always done his own analysis. The report by Reuters that Berkshire has retained Goldman Sachs on behalf of its Burlington Northern railroad presumably to evaluate the possible acquisition of CSX (or Norfolk Southern) after Union Pacific was reported to be considering a merger with Norfolk Southern. Berkshire did not use investment bankers when it acquired Burlington Northern. Also since Buffett’s policy is to avoid a bidding war in a merger, it is unlikely Berkshire would bid against Union Pacific for Norfolk Southern. Since regulatory approval for a major rail merger would likely extend beyond December 31 when Buffett is replaced as CEO by Greg Abel, is this a signal that Berkshire under Abel would rely on investment bankers? Berkshire has almost never retained investment bankers to provide investment advice related to a merger or acquisition. Buffett prefers to negotiate directly with business owners and executives, supported primarily by legal advisors and internal staff.