Buffet bets on US future with rail purchase 

Source: ReutersWarren Buffet

US billionaire investor Warren Buffet has gone locomotive in a deal to take over one of the largest rail operators in North America.

Buffet's investment group Berkshire Hathaway has announced it will buy the 77.4% of freight line Burlington Northern Santa Fe (BNSF) that it does not already own.

The offer values BNSF at $US44 billion ($NZ61 billion) including $10 billion in debt, making it the largest acquisition in Berkshire Hathaway's history.

Buffet has described the deal as a wager on the future of the United States saying the country's future prosperity depends on having an efficient and well maintained rail system.

"America must grow and prosper for railroads to do well. Berkshire's $34 billion investment in BNSF is a huge bet on that company, CEO Matt Rose and his team, and the railroad industry," Buffet said.

Just seven months ago, Buffet described the US economy as having "fallen off a cliff" with the economic climate at the worse end of the scale he expected.

Now, MacQaurie Private Wealth analyst Ian Witters says Buffet appears to have the confidence in the US's recovery.

"He takes a long-term view. Railways are core pieces of infrastructure so I suspect that what it's about," he says.

Burlington Northern has over 51,000 kilometres of track, employs 40,000 people and has 6,700 trains.

The deal is expected to be finalised in the first quarter of next year.