Warren Buffett's

Berkshire Hathaway

(BRKA)

agreed to buy sweatshirt maker

Russell

(RML)

for $18 a share.

Atlanta-based Russell said the all-cash deal will strengthen its finances and should close in the third quarter. The pact will give Russell shareholders a 35% premium to Monday's closing price.

"Russell will be better positioned against our worldwide competitors in all three segments of our business and that includes apparel, sports equipment and athletic shoes," said Russell CEO Jack Ward. "We also owe our gratitude to the thousands of people who have played roles in the development of this organization from a small Alabama apparel operation founded in 1902 to a major player in the global sporting goods marketplace of today."

Late Monday, Russell surged $4.64 to $17.94.