Union Pacific Corporation and Norfolk Southern Corporation announced today a definitive agreement to merge, creating what is termed as America’s first “transcontinental railroad.” This historic deal, valued at about $85 billion for Norfolk Southern, looks to connect over 50,000 route miles across 43 states, linking nearly every corner of North America and approximately 100 ports.
The proposed merger is expected to significantly transform the U.S. supply chain by eliminating interchange delays, opening new routes, and expanding intermodal services, leading to faster transit times on key rail corridors.
Union Pacific CEO Jim Vena is slated to lead the combined company, which will be headquartered in Omaha, NE, with Atlanta, GA, remaining a core location.
Deal terms:
Under the terms of the agreement, Norfolk Southern shareholders will receive 1 Union Pacific common share and $88.82 in cash for each share of Norfolk Southern, implying a value of $320 per share. This deal values Norfolk Southern at an enterprise value of $85 billion, resulting in a combined enterprise value of over $250 billion. The companies anticipate about $2.75 billion in annualized synergies.
KEY QUOTES:
“The impact of this agreement cannot be overstated. A single coast-to-coast network will deliver faster, more competitive service by eliminating car touches and interchange delays, opening new routes, expanding intermodal services, and ensuring faster transit times on key rail corridors. We will take even more trucks off highways, decreasing congestion, and reducing wear-and-tear on taxpayer-funded roads.”
“Imagine seamlessly hauling freight from Pittsburgh, Pennsylvania, to Colton, California, and moving tomato paste from Huron, California, to Fremont, Ohio, lumber from the Pacific Northwest, plastics from the Gulf Coast, copper from Arizona and Utah, and soda ash from Wyoming. Today, more than 40,000 Union Pacific and Norfolk Southern union employees are moving nearly all the goods essential to our daily lives.”
“Realizing the promise of the Union Pacific Transcontinental Railroad will not be easy, and we will need our people. It is our expectation that the combination will lead to job growth and it is our intention to preserve Union Pacific and Norfolk Southern union jobs.”
“Union Pacific and Norfolk Southern are two of the strongest-operating railroads, with a combined 360 years of history. The Norfolk Southern team is known as the Thoroughbreds with a history that dates to 1827—35 years older than Union Pacific. Their team has been on a solid trajectory of delivering strong results. I am honored and excited that if approved, the Thoroughbreds will join us in Building America becoming a part of Union Pacific.”
Jim Vena, Union Pacific CEO
“Norfolk Southern, like Union Pacific, is a railroad integral to the U.S. economy, with a storied 200-year legacy of serving customers across 22 states in the eastern half of the nation. Our safety, network, and financial performance is among the best we’ve had as a company, as is our customer satisfaction. And it is from this position of strength that we embark on this transformational combination. We are confident that the power of Norfolk Southern’s franchise, diversified solutions, high-quality customers and partners, as well as skilled employees, will contribute meaningfully to America’s first transcontinental railroad, and to igniting rail’s ability to deliver for the whole American economy today and into the future. Union Pacific is a true partner that shares our belief in rail’s ability to deliver for all stakeholders simultaneously, and we are excited for our future together.”
Mark George, CEO of Norfolk Southern
