NEW YORK - WARREN Buffett's Berkshire Hathaway Inc has struck a deal to buy the rest of railroad Burlington Northern Santa Fe Corp for US$26 billion (S$36.4 billion), Buffett's biggest acquisition ever.

In a statement announcing the deal on Tuesday, Buffett said railroads are key for US growth and will grow as the nation grows. 'It's an all-in wager on the economic future of the United States,' he said. 'I love these bets.'

Berkshire Hathaway will pay US$100 per share in cash and stock for the 77.4 per cent of the railroad's shares it does not already own. The price represents a premium of 31.5 per cent over Burlington Northern's closing stock price on Monday, and values the railroad at US$34 billion.

'We'll have more people moving more goods 10, 20, 30 years from now,' Buffett, Berkshire chairman and CEO, said on CNBC television. 'I just believe this country will prosper.' He said he was not interested in buying the rest of Burlington Northern rival Union Pacific Corp, whose shares he also owns. He said he expected the companies to remain rivals for the next half century.

The Burlington Northern deal is 'clearly a move to leverage on coal,' said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. 'Because Burlington Northern moves coal around the country, I think Buffett is trying to get into coal but doing it in a cheaper way,' he said.

Burlington Northern shares surged 29 per cent to US$97.78 in premarket trade. Among its peers, Union Pacific gained 8.1 per cent to US$59.50, CSX Corp was up 8.5 per cent to US$46.50, and the iShares Dow Jones Transportation Average ETF climbed 5 per cent to US$67.50. -- REUTERS