Berkshire Buys Burlington Northern

(Updated with Buffett's comments on stock split, premarket stock price moves.)

FORT WORTH, Texas (TheStreet) -- Burlington Northern (BNI) will be acquired by billionaire investor Warren Buffett's Berkshire Hathaway (BRK.A) in a $44 billion transaction.

Berkshire Hathaway said it will buy the remaining 77.4% of outstanding shares of Burlington Northern for $100 a share in cash and stock, making it the largest acquisition in Berkshire's history. The deal also includes $10 billion of outstanding debt.

"Our country's future prosperity depends on its having an efficient and well-maintained rail system," Buffett said in a statement."Most important of all, however, it's an all-in wager on the economic future of the United States. I love these bets."

Shares of Burlington Northern surged in Tuesday's premarket session, jumping 29% to $98.10. Other railway companies were also on the rise, with CSX (CSX) rising 6.2%, Union Pacific (UNP) adding 7.2% and Norfolk Southern (NSC) climbing 6.6%.

In a separate release, Berkshire said its board has approved a 50-for-1 split of its Class B shares. The stock split is subject to the approval of Berkshire's shareholders.

During an interview with CNBC, Buffett said that the stock split will allow anyone holding only one share of Burlington Northern to opt for the tax free exchange. He said a small shareholder will be able to have the exact same availability as a large shareholder.

-- Written by Robert Holmes in New York.

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