Standard & Poor's said it will add Warren Buffett's Berkshire Hathaway Inc to its flagship S&P 500 stock index <.SPX>, as the company prepares to acquire railroad operator Burlington Northern Santa Fe Corp .

Berkshire's Class B shares rose $5.10, or 7.5 percent, to $73.10 after the announcement. The company's Class A shares, which were not split, closed Tuesday down $1,449 at $101,751.

Berkshire did not immediately return a request for comment.

The addition of a company to the S&P 500 often boosts its share price because many portfolio managers try to track the index, and must buy shares of companies that enter it.

Berkshire will replace Burlington Northern in the S&P 500 on a date to be announced. It will also replace the second-largest U.S. railroad company in the S&P 100 index of the largest blue-chip companies.

S&P's announcement followed Berkshire's 50-for-1 split last week of its Class B shares. That move will make it easier for Burlington shareholders to exchange their stock for Berkshire stock in a tax-free swap, rather than accept cash.

Berkshire expects this quarter to acquire 77.4 percent it did not already own of Burlington Northern in a stock-and-cash transaction it originally valued at about $26.4 billion.

With a market value of about $158 billion, Berkshire is the largest publicly-traded U.S. company not in the S&P 500.

The Omaha, Nebraska-based company had long been excluded from the index because its shares were not liquid enough.

Last week, though, Buffett told CNBC television that the stock split could give Berkshire about 700,000 investors.

Berkshire operates roughly 80 businesses and has tens of billions of dollars of stock and bond investments.

Its largest previous acquisition was its 1998 takeover of the reinsurer General Re.

S&P is a unit of McGraw-Hill Cos .

(Reporting by Jonathan Stempel; Editing Bernard Orr)

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