In a landmark move, Union Pacific and Norfolk Southern revealed plans on Tuesday for an $85 billion merger that would establish the first coast-to-coast railroad operated by a single company in the United States. The proposed merger would link 50,000 miles of rail lines across 43 states and Washington, D.C., transforming the nation’s freight transportation landscape.
Railroad executives hailed the deal as a turning point for the industry.
“Railroads have played a central role in America’s development since the Industrial Revolution. This merger marks the next evolution,” said Union Pacific CEO Jim Vena. “Envision shipping steel from Pittsburgh to Southern California, or tomato paste from California’s Central Valley to Ohio—seamlessly and efficiently.”
Vena added that the new network would enable nationwide transport of goods like lumber from the Pacific Northwest, plastics from the Gulf Coast, copper from Arizona and Utah, and soda ash from Wyoming. “The railroad touches nearly everything Americans use daily.”
Timeline for Approval
The companies plan to file an application with the Surface Transportation Board (STB) within six months, with the goal of finalizing the deal by early 2027. Until then, Union Pacific and Norfolk Southern will operate independently. Union Pacific’s headquarters will remain in Omaha, Nebraska, while Atlanta will serve as a long-term operations hub.
Financial Terms
Union Pacific projects the merger will increase its valuation to $30 billion and generate $2.75 billion in annual revenue. As part of the agreement, Norfolk Southern shareholders will receive $88.82 in cash per share plus one share of Union Pacific stock. They will retain a 27% stake in the newly combined company.
The deal includes a $2.5 billion reverse termination fee and will move forward without the use of a voting trust.
Impact on Jobs
Union Pacific emphasized that all union employees who want a job in the new organization will have one. The company expressed strong confidence in workforce stability as it transitions to a unified network.
“Our safety, service, and financial performance are among the best we’ve seen,” said Norfolk Southern CEO Mark George. “We’re entering this merger from a position of strength. With our diversified services, strong partners, and dedicated employees, we believe this transcontinental rail system will set a new standard for U.S. freight transport.”
The merger is poised to reshape supply chains and significantly enhance the efficiency of moving goods across America, ushering in a new era for the freight rail industry.
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