Warren Buffett bought an expensive train set Tuesday, betting $26 billion for Fort Worth's Burlington Northern Santa Fe railroad on the hunch that a recovering economy will stoke the nation's appetite for coal and Chinese imports.

The billionaire investor's holding company, Berkshire Hathaway, agreed to pay $100 a share in cash and stock for the 77 percent of BNSF it didn't already own.

His offer drives up BNSF's total value to $34 billion, including the stake he already owned. Add $10 billion in assumed debt, and the $44 billion total price tag makes it Buffett's biggest buy ever.

"It's an all-in wager on the economic future of the United States," Buffett said in a prepared statement. "I love these bets."

If the deal closes as planned early next year, it would give Berkshire 32,000 miles of track across 28 states, largely between the Mississippi River and the Pacific Ocean. BNSF competes in the western U.S. with Union Pacific Corp., which is based in Buffett's hometown of Omaha, Neb. The two companies are in a virtual dead heat to be the nation's largest railroad.

BNSF rails link key West Coast container ports such as Long Beach to inland distribution hubs such as the one adjacent Fort Worth's Alliance Airport. Moving containers from ships to trains to trucks is a network primed to pump Asian wares to American consumers when the global economy rights itself.

The railroad also has strong access to the low-sulfur coal of the Powder River Basin in Wyoming and Montana. Powder River Basin coal, hauled around the country in lengthy unit trains, heated railroad profits during the last energy spike.

"This is a coal and Asian trade route deal," said Jason Seidl, a transportation analyst for Dahlman Rose & Co. in New York. "The short run for both of those is bad, but as a longer-term play it makes sense."

Buffett's offer for BNSF shares was 31 percent more than Monday's close of $76.07.

The deal struck with lightning speed, said BNSF chief executive Matthew Rose and Buffett in television interviews.

"I said Matt, if you're ever looking for a home for the railroad, Berkshire would make a good one," Buffett told Fox Business News on Tuesday. "He didn't throw me out of the office, so the next day I made him an offer."

Buffett quickly pitched Rose on a sale at Fort Worth's historic Ashton Hotel on Oct. 23, and the two reached a handshake agreement. Meeting Monday night, the BNSF board took just 15 minutes to approve what Buffett said was his sole offer, Rose told Bloomberg.

Buffett admitted not knowing much about railroads, but Berkshire has a history of buying good companies with strong management teams and keeping them intact. "Their management team is one of the most respected in the industry," Seidl said, referring to BNSF.

The company's headquarters will remain in Fort Worth. About 3,300 of the company's 40,000 employees work in North Texas.

Buffett's empire stretches from insurance to energy to jewelry. Berkshire's subsidiaries include underwear maker Fruit of the Loom, car insurer Geico and restaurant chain Dairy Queen.

His North Texas holdings include several Fort Worth companies: Acme Brick, boot maker Justin Brands, and electronic components distributor TTI.

Buffett-watchers stopped short of saying he overpaid for a stock whose all-time high is $114 – just $14 less than his offer. But BNSF didn't come cheap.

"This is very atypical," said Alice Schroeder, a Buffett biographer and Bloomberg News columnist. "I was not surprised by the deal, but I was very surprised by the price. Compared to the normal terms that he gets on deals, this is an expensive valuation."

BNSF stands out for its strong financial performance, and some analysts said it may outperform its rivals as the recovery gains traction.

As diesel fuel costs rise, railroads feel only a quarter of the impact that trucking companies see in their costs because locomotives are substantially more fuel efficient per ton of freight moved, analysts say.

Congestion on the nation's rails three years ago that damped profits for railroads has largely been addressed through better port facilities and improved routing, Seidl said, setting the stage for railroads to prosper.

The big premium for BNSF may serve as the capstone for a "railroad renaissance" that saw major rail carriers invest billions in improved track, rail yards and infrastructure, said Anthony Hatch, an independent railroad analyst in New York.

BNSF "will grow faster than the economy over the next cycle, in my opinion," he said Tuesday. "This company is going to do well through the next cycle and beyond because it's becoming more important to how the West sources and moves its goods, and how the East connects to Asia."

Railroads have been able to sustain price increases even during the slowdown, and that pricing power could fuel much higher earnings as the economy picks up speed.

Investors sent BNSF shares up $20.93 to $97 Tuesday. Berkshire's Class A shares rose $1,700 to $100,450.

Buffett already has a considerable Lionel model train collection, Rose said in his Fox Business News interview, and now has 6,000 full-size locomotives to round it out. Buffett, whose buy-and-hold investment strategies have become a gold standard for investors large and small, said he's buying into an underappreciated business.

"The deregulation that took place starting in 1980 has actually benefited the shippers enormously, and we're moving far, far more freight using far less fuel very efficiently," Buffett said. "My guess is that people will see the rails for what they are – really an outstanding way of moving freight around the country."

History: The BNSF Railway is the product of 390 different railroad lines consolidating in the last 150 years. The companies whose name it bears, Burlington Northern Inc. and Santa Fe Pacific Corp., merged in 1996.

Scope: One of the largest railroads in North America, with 32,000 miles of track in 28 states and two Canadian provinces.

Employees: 40,000

Financials: $18 billion in revenue in 2008; $2.1 billion profit

Locomotives and freight cars: 6,510 locomotives and 82,555 freight cars at the end of 2008. The average BNSF train moves the equivalent of 280 truckloads.

What it carries: Everything from construction and agricultural products to petroleum, chemicals, and food and beverages.

It's one of the largest carriers of low-sulfur coal, hauling enough annually to power one out of 10 U.S. homes.

It hauls enough grain to supply 900 million people with a year's supply of bread, and enough fertilizer to cover a field the size of Kansas.

It moves enough sugar to make 3 million batches of cookies a year.

Market share: 49 percent of western U.S. rail traffic in 2008.

SOURCES: SEC filings; BNSF Web site