Do Railroad Takeovers Only Happen in Crises?
Warren Buffett seized the opportunity to buy Burlington Northern during the financial crisis. Now private equity is eyeing Kansas City Southern during a pandemic.
A bid for Kansas City Southern by Blackstone and Global Infrastructure Partners is a bet on Mexico.
Photographer: Whitney Curtis/BloombergThe time may finally be right for another big railroad deal. All it took was another economic downdraft.
Private equity firms Blackstone Group Inc. and Global Infrastructure Partners are reportedly weighing a joint bid for Kansas City Southern that would value the railroad at about $21 billion including debt. Any takeover would also add to an aggressive flurry of dealmaking over the past few days after a pandemic-inspired lull. Siemens Healthineers AG agreed to buy U.S. radiotherapy company Varian Medical Systems Inc. for about $16 billion, while 7-Eleven owner Seven & i Holdings Co. is paying $21 billion for Marathon Petroleum Corp.’s Speedway gas stations. Waiting in the wings is a potential takeover of the popular video-sharing app TikTok and a Nvidia Corp. buyout of SoftBank Group Corp.’s Arm Ltd. chip-designing business. The sudden rash of dealmaking suggests buyers with supple balance sheets are getting more comfortable with the trajectory of an eventual recovery from the coronavirus pandemic, even as cases surge again.