Warren Buffett buying Burlington Northern

Berkshire will pay about $16 billion in cash and the rest in stock. Of that $16 billion, it will pay $8 billion from its own cash and borrow the rest.

RAILS RALLY

BNSF shares were up 28.4 percent to $97.65 in early trading on the New York Stock Exchange. Among its rivals, Union Pacific shares gained 5.7 percent to $58.18, Norfolk Southern jumped 5.7 percent to $49.30, and CSX Corp was up nearly 7 percent to $45.80. Canadian rail shares also rallied.

"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 BNSF rival Union Pacific. He said he expected the companies to remain rivals for the next half century.

"We won't be making any huge deals for a while," he told CNBC. "I made (BNSF CEO Matt Rose) an offer and he said he would take it to his board and it took about 15 minutes."

BNSF, with its Western presence, is a key shipper of Asian goods into the interior of the United States and is the leading shipper of coal and agricultural commodities, according to analysts at Robert W. Baird.

About a third of BNSF's revenue comes from intermodal freight -- containers that can be moved from ship to rail or truck -- 23 percent from coal and 19 percent from farm goods.

The deal makes Fort Worth, Texas-based BNSF the most valuable U.S. railroad by market capitalisation. By comparison, Union Pacific has a market cap of about $28 billion, while Norfolk Southern and CSX are each worth about $17 billion, according to Thomson Reuters data.

BNSF's 2008 revenue of $18 billion was tops among U.S. railroads, about $1 billion ahead of its nearest rival, Union Pacific.