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Microsoft Corp. founder Bill Gates now controls more than 46 million CN shares, or 10.04 per cent of the Montreal-based railway.Ryan Pierse

Bill Gates owns a $3.2-billion train set, making him the largest shareholder in Canadian National Railway Co.

The Microsoft Corp. founder now controls more than 46 million CN shares, or 10.04 per cent of the Montreal-based railway.

CN disclosed his holding in its management information circular for its annual meeting Wednesday in Toronto.

"The only person who beneficially owns, or exercises control or direction over, directly or indirectly, shares carrying 10 per cent or more of the voting rights attached to any class of shares of the company is Mr. William H. Gates III," according to the circular.

Based on CN's share price of $69.88 on Thursday, the railway has a stock market capitalization of $32-billion, with Mr. Gates' portion valued at $3.2-billion.

Through Cascade Investment LLC, he controls 37.4 million CN shares. As co-trustee of the Bill & Melinda Gates Foundation, he oversees another 8.6 million CN shares.

In 2006 filings with the U.S. Securities and Exchange Commission, Mr. Gates emerged as a CN shareholder, owning a 5.8-per-cent stake at the time through Cascade, and another 0.8 per cent through the foundation.

"He has been gradually buying more CN stock," RBC Dominion Securities Inc. analyst Walter Spracklin said.

Through holding company Berkshire Hathaway Inc., billionaire Warren Buffett acquired full control of Burlington Northern Santa Fe Corp. of Fort Worth, Tex., in early 2010. Berkshire already owned 22.6 per cent of BNSF before it took complete ownership.

Mr. Gates and Mr. Buffett "are pretty good buddies. Mr. Buffett must have given a tip to buy railroads at one of their bridge games," Mr. Spracklin said with a laugh.

Mr. Spracklin, who met recently with CN management, said he's impressed with consistent profit being reported at Canada's largest railway, despite harsh winter weather.

CN will release its first-quarter financial results on Tuesday.

CN executives are expected to reiterate their forecast for $1.05-billion in free cash flow for 2011, said Mr. Spracklin, who has a 52-week price target of $77 for CN.