In a huge vote of confidence in the recovering U.S. economy, Warren Buffett's Berkshire Hathaway Inc. on Tuesday agreed to buy Burlington Northern Santa Fe Corp., which runs the nation's second largest railroad.

Already approved by the boards of both companies, the deal would be the biggest acquisition ever for Berkshire Hathaway Inc., the investment conglomerate led by Buffett. He is known as the "Oracle of Omaha" for his successful investments, which have made him one of the wealthiest and most influential people in the world.

The investment includes $26 billion in stock and cash, the acquisition of $10 billion in debt and $8 billion Berkshire has invested in the company over the past two years, Bloomberg reported.

"Berkshire's ... investment in BNSF is a huge bet on that company, CEO Matt Rose and his team, and the railroad industry," 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.

"Our country's future prosperity depends on its having an efficient and well-maintained rail system," Buffett said. "Conversely, America must grow and prosper for railroads to do well."

"We are thrilled to have the opportunity to become a part of the Berkshire Hathaway family," said Matthew K. Rose, Burlington Northern Santa Fe chairman, president and chief executive officer. "We admire Warren's leadership philosophy supporting long-term investment that will allow BNSF to focus on future needs of our railroad, our customers and the U.S. transportation infrastructure. This transaction offers compelling value to our shareholders and is in the best interests of all of our constituents including our customers and employees."

Berkshire also owns stock in two other major U.S. railroads -- 9.56 million shares of Union Pacific Corp. and 1.93 million shares of Norfolk Southern Corp., as of June 30.

The deal gives Berkshire a huge stake in the economic recovery of the U.S. and globally. Rail transportation has been one of the few businesses that has been able to maintain pricing power during the economic downturn, as high energy prices and an aging highway system drive up the cost of trucking.

Buffett said in 2007 that railroads may prosper at the expense of trucks.

Burlington Northern made about 31 percent of its money in the past quarter from shipments of consumer products from the West to major hubs such as St. Louis, Kansas City and Chicago.

Its next largest segment was coal, at 27 percent, followed by industrial products -- such as farm equipment, lumber and chemicals -- at 21 percent. Its agricultural products segment, 20 percent of its total revenue, includes major crops such as corn, wheat and soybeans -- much of that exported to China.

Burlington Northern serves more of the nation's major grain-producing regions than any other railroad.

The company ships vast amounts of coal from the Powder River Basin in Wyoming across Nebraska to points in the Midwest and points east.

Berkshire also owns MidAmerican Energy Holdings, which controls power companies in the Midwest and Pacific Northwest and owns 11 coal-fired plants. The railroad could be a strategic acquisition because its tracks run right through both regions, a major coal supply route for power plants.

A majority of the 50 lowest-cost steam-electric plants in the United States burn coal from the Powder River Basin, according to BNSF.

In another measure of its size, Burlington Northern said on its Web site that it, "hauls enough fertilizer in one year to fertilize a field the size of the entire state of Kansas."

BNSF will join a variety of famous companies under the Berkshire banner, from insurers such as Geico to the Nebraska Furniture Mart.

Berkshire's biggest acquisition before BNSF was the $16 billion stock purchase of reinsurance giant General Re announced in 1998.

Journal Star reporter Richard Piersol, the Associated Press and MarketWatch contributed to this report.