Warren Buffett's Berkshire Hathaway Inc. says it has agreed to buy Burlington Northern Santa Fe railroad in a deal valuing the company at $34 billion US.

The deal itself is valued at $44 billion US as Berkshire will be assuming $10 billion US of the railroad's debt.

"Our country's future prosperity depends on its having an efficient and well-maintained rail system," Berkshire chair Warren Buffett said. "Its an all-in wager on the economic future of the United States. I love these bets."

Berkshire Hathaway already owns a stake of about 22 per cent in Burlington Northern, and is now offering $100 US a share for the rest of the company. That is a 32 per cent premium over Burlington's closing price on Monday.

The deal announced Tuesday has been approved by the boards of both companies, but the deal is contingent on shareholder approval.

If Buffett is succesful in buying Burlington and its 51,000 kilometres of railroad track, it would be the biggest acquisition ever for Berkshire Hathaway Inc.

In 1999, Burlington Northern attempted a merger with Canada's largest railway company, Montreal-based Canadian National Railway. But the deal was scuttled by the U.S. federal agency that oversees the railway industry.

Since then, CN has moved ahead with several smaller acquisitions to boost its American presence, but the two companies have also co-operated with each other to share infrastructure and increase efficiency.

Also on Tuesday, the Berkshire conglomerate announced plans for a 1-for-50 stock split of its Class B shares. The shares closed at $3,265 US on Monday.

The Burlington acquisition consists of cash and stock components, and Berkshire said it needs to increase its float of B shares to "to accommodate holders of smaller amounts of BNSF shares who opt for a share exchange rather than a cash payment."