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In a landmark deal announced Tuesday, Union Pacific and Norfolk Southern will merge, creating the nation’s first transcontinental railroad. The merger will link over 50,000 miles of track, connecting the East and West Coasts under single ownership for the first time in history.
Union Pacific’s acquisition of Norfolk Southern is valued at $85 billion, with the combined entity estimated to be worth over $250 billion. The cash-and-stock deal offers Norfolk Southern shareholders $320 per share, a 25% premium.
This monumental merger promises to reshape the American logistics landscape. The companies project significant benefits, including revitalized domestic manufacturing, robust economic growth, and job creation, while also preserving existing union jobs.
They aim to compete more effectively with Canadian railroads, reclaiming U.S. freight volume and bolstering American employment. The merger will also position the new entity as a formidable competitor to Warren Buffett’s BNSF Railway.
Union Pacific CEO Jim Vena hailed the merger as a “transformational” step forward for the rail industry, envisioning seamless freight transport from coast to coast, carrying everything from steel and lumber to plastics and produce. The combined network anticipates faster, more comprehensive service through eliminated interchange delays, new routes, expanded intermodal services, and shorter transit times. A reduction in highway congestion and wear-and-tear on public roads is also expected.
Both companies’ boards unanimously approved the transaction, which now awaits review and approval from the Surface Transportation Board, along with customary closing conditions and shareholder approval. The application is expected to be filed within six months, with a target closing date in early 2027.