Warren Buffett is not in the market to buy another railroad but he met with the CEO of CSX earlier this month and discussed cooperation to make freight rail more efficient, he told CNBC’s Becky Quick on Monday.
Berkshire Hathaway Chairman Buffett and CEO-designate Greg Abel met with CSX CEO Joseph Hinrichs in Omaha, Nebraska, on Aug. 3 in his office alone without any advisors present. They made clear to Hinrichs that they would not make a bid for CSX, but believed they could cooperate more to gain some of the same benefits that would come from combining the two companies.
CSX closed about 5% lower at $32.81 per share on the news that Buffett isn’t interested in buying a railroad. Union Pacific fell about 2%, Norfolk Southern lost more than 2%, and Berkshire Hathaway dropped less than 1%.
Buffett’s comments come after Berkshire Hathaway’s BNSF Railway and CSX announced a partnership Friday to provide new coast-to-coast rail services. The partnership is a way to move freight across the U.S. more efficiently without BNSF paying a premium to acquire CSX.
The normally staid railroad sector was shaken up last month when Union Pacific announced plans to buy Norfolk Southern for $85 billion, which set off speculation that Berkshire could join the takeover fray. CSX shares jumped 9% in July on the speculation.