Union Pacific, Atlanta's Norfolk Southern to merge in historic $85B deal
Photo courtesy of Union Pacific
ATLANTA - Union Pacific and Norfolk Southern, two of the most iconic rail companies in the U.S., have announced a landmark agreement to merge, forming the country’s first true coast-to-coast rail network.
What we know:
The new company will operate over 50,000 route miles across 43 states and serve approximately 100 ports, promising to reshape American freight transportation.
Under the deal, Union Pacific will acquire Atlanta-based Norfolk Southern in a cash-and-stock transaction valued at $85 billion. Norfolk Southern shareholders will receive $320 per share — a 25% premium — consisting of one Union Pacific share and $88.82 in cash for each share held. Once finalized, the combined enterprise will be valued at over $250 billion.
Union Pacific CEO Jim Vena, who will lead the merged company, said the merger will eliminate interchange delays, improve delivery times, and create new efficiencies across the rail network. "Imagine moving steel from Pennsylvania to California without delays, or fresh produce from California to the Midwest," he said. "This is about building a more resilient, competitive America."
The merger aims to benefit multiple stakeholders:
- Shippers will experience faster and more seamless coast-to-coast freight service.
- Workers will retain jobs, with rail volume growth expected to create additional employment.
- Communities can expect safer, more efficient rail operations and continued philanthropic investment.
- Shareholders may see up to $30 billion in value from expected synergies.
The merged company plans to invest heavily in infrastructure, innovation, and safety, with a continued focus on reducing road congestion and lowering emissions by drawing freight away from highways and onto rail. Both companies will maintain safety as a top priority, incorporating advanced technologies to detect mechanical issues and reduce accidents.
The headquarters of the combined company will be in Omaha, Nebraska, while Atlanta will remain a major hub for technology and innovation efforts.
What's next:
The agreement has been unanimously approved by both boards of directors and now awaits regulatory approval from the Surface Transportation Board, as well as shareholder consent. If approved, the transaction is expected to close by early 2027.
The other side:
The Rail Passengers Association issued a statement saying the announcement should be treated with "skepticism."
Its president, Jim Mathews, said he believes the Surface Transportation Board will review the proposal and carry out its due diligence.
"The past decade has seen Class I railroads steadily losing market share to trucking in pursuit of shareholder dividends. While that’s been good for Wall Street, it’s meant worse rail service for passengers and shippers in the rest of the country," Mathews said. "Rail Passengers will be actively involved in protecting the rights of passengers as this proposal is examined by the STB."