Union Pacific announced Tuesday it is seeking to acquire Atlanta-based Norfolk Southern in a proposed $85 billion deal that would create the first coast-to-coast railroad in U.S. history.
According to the Associated Press (via GPB News), the merger would link Union Pacific’s western rail network with Norfolk Southern’s routes throughout the East, streamlining shipments of goods and raw materials across the country. If approved, the tie-up could mark the beginning of a final wave of railroad consolidation, putting pressure on rivals BNSF and CSX to consider a similar move.
Under the proposed terms, Norfolk Southern shareholders would receive one Union Pacific share and $88.82 in cash per NS share, valuing the company at roughly $320 per share. Union Pacific shares rose slightly in premarket trading, while Norfolk Southern’s stock dipped more than 2%.
Union Pacific CEO Jim Vena said the deal would eliminate the need for mid-route handoffs and accelerate coast-to-coast deliveries. “This transaction is the next step in advancing the industry,” Vena said.
However, the deal faces regulatory hurdles. The Surface Transportation Board (STB) has raised the bar for mergers after past consolidations led to widespread service disruptions, including Union Pacific’s own 1996 merger with Southern Pacific.
Still, the STB approved a $31 billion Canadian Pacific-Kansas City Southern merger in 2023, citing its potential to boost North American trade.
Union Pacific and Norfolk Southern plan to submit their merger application within six months and aim for approval by early 2027.
