Photographer: Luke Sharrett/Bloomberg

Buffett's Rail CFO Sees Challenges for Rivals Seeking to Merge

  • BNSF's Piggott comments in call for bondholders, analysts
  • `The regulatory environment is still challenging,' she says

Julie Piggott, the chief financial officer of the railroad at Warren Buffett’s Berkshire Hathaway Inc., said government watchdogs may be reluctant to allow more consolidation of major companies in her industry.

The topic of regulators’ response to a possible merger was broached on a call for bondholders of Berkshire’s BNSF Railway on Tuesday, a day after Bloomberg News reported that Canadian Pacific Railway Ltd. was exploring a takeover of U.S. carrier Norfolk Southern Corp.

“This is still very speculative, I think, and rumor-based, but in our view we think that the regulatory environment is still challenging,” Piggott said. “So we’ll see where this goes.”

A transcontinental merger would alter a North American industry landscape that has been little changed since 1997, when Norfolk Southern and CSX Corp. finished acquiring Conrail Inc. Norfolk Southern and CSX now compete east of the Mississippi River, while Union Pacific Corp. and BNSF operate in the western U.S. and the two Canadian carriers run chiefly in their home country.

Piggott said she wasn’t prepared to discuss how a merger of two rivals would affect BNSF’s competitive position. Canadian Pacific and Norfolk Southern have both declined to comment on their plans.

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