Berkshire Hathaway approves 1-for-50 stock split

Berkshire Hathaway Inc. shareholders have approved splitting the company's class B shares50-fold as part of the company's $26.3-billion US acquisition of Burlington Northern Santa Fe Corp.

In November, Warren Buffett's company offered $100 US a share for the78 per cent of BNSF that it did not already own. That was a 32 per cent premium over Burlington'sstock priceat the time.

The stock split will enable Berkshire to offer even small BNSF shareholders Berkshire stock as part of its acquisition of the second-largest railway in the United States. Without a stock trading in three-digit prices, it would have been next to impossible to satisfy small BNSF shareholders whose stake was valued at less than the $3,000 Berkshire's cheapest shares trade at.

Under the deal, every shareholder who currently owns a B share will receive 50 shares of the new Berkshire B share, colloquially known as a "baby Berk." As of the opening of trading on Thursday, Berkshire's class B stock will trade at roughly $67 per share. The B shares were trading at $3,436.80 US at midday on Wednesday, up more than three per cent on the day.

Experts say the move could be a positive for the stock in making it accessible to more investors, and also allowing it to be included on new stock indexes. Inclusion in an index such as the S&P 500 (which Berkshire's A shares are excluded from because of their prohibitively high price) can be a boon for a stock as mutual funds and ETFs buy the stock to track the index.

Berkshire's class A shares, which remain the most expensive U.S. stock at over $100,000 apiece, won't be split.