Union Pacific Acquires Norfolk Southern for $85 Billion

In one of the biggest mergers in the rail transportation, Union Pacific Corporation and Norfolk Southern Corporation in the US have agreed on Tuesday to create America’s first transcontinental railroad.

Union Pacific will acquire Norfolk Southern in a stock and cash transaction, implying a value for Norfolk Southern of $320 per share based on Union Pacific’s unaffected closing stock price on 16 July 2025, and representing a 25% premium to Norfolk Southern’s 30-trading day volume weighted average price on the same day.

The value per share implies an enterprise value of $85 billion for Norfolk Southern, resulting in the creation of a combined enterprise of over $250 billion. These companies will seamlessly connect over 50,000 route miles across 43 states from the East Coast to the West Coast, linking approximately 100 ports and nearly every corner of North America.

The companies expect to file their application with the Surface Transportation Board (STB) within six months, in which the companies will describe how the combined rail network will provide safer, faster, and more reliable service and increased competition to a broad range of stakeholders.

Based on 2024 results, the pro-forma combined company would have revenues of approximately $36 billion, EBITDA of approximately $18 billion, operating ratio of 62%, and free cash flow of $7 billion. The transaction is expected to be accretive to Union Pacific’s adjusted EPS per share in the second full year after closing and rising to high single digit accretion thereafter.

This combination will transform the US supply chain, unleash the industrial strength of American manufacturing, and create new sources of economic growth and workforce opportunity that preserves union jobs.

Railroads Vital for US Economy

Union Pacific CEO Jim Vena said that railroads have been an integral part of building America since the Industrial Revolution, and this transaction is the next step in advancing the industry.

“Imagine seamlessly hauling steel 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. Right now, tens of thousands of railroaders are moving almost everything we use. You name it, and at some point, the railroad hauled it,” he said.

The Union Pacific Transcontinental Railroad will connect people, strengthen communities, and build a stronger, more competitive America. Both railroads envision every union employee who wants a job in the combined company will have one.

Together, the companies aim to be the safest railroad in North America and deliver the service customers rely on with operational excellence. The combined company will deliver faster, more comprehensive freight service to the US shippers by eliminating interchange delays, opening new routes, expanding intermodal services, and reducing distance and transit time on key rail corridors.

The Union Pacific Transcontinental Railroad will also decrease highway congestion, reducing wear-and-tear on taxpayer-funded roads. Today, Union Pacific and Norfolk Southern invest approximately $5.6 billion annually in infrastructure, innovation, and network expansion.

Norfolk Southern CEO Mark George said that Norfolk Southern, like Union Pacific, is a railroad integral to the US 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 have had as a company, as is our customer satisfaction. And it is from this position of strength that we embark on this transformational combination,” he said.

Norfolk Southern is confident that the power of its 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, he added.