Fact Brief: The proposed merger between Union Pacific and Norfolk Southern railroads

Written By Shawn Geddes

The proposed merger would create the first coast-to-coast railroad in the United States.

The Norfolk Southern–Union Pacific merger, announced on July 29, 2025, is a landmark $85 billion deal that will create America’s first coast-to-coast freight railroad, fundamentally transforming North American rail logistics and supply chains.

This fact brief breaks summarizes the deal, breaks down key details, and provides resources for further reading.

Executive summary

Union Pacific has announced its intention to acquire Norfolk Southern in a deal valued at about $85 billion. The deal would be a mix of stock and cash. If the merger is approved, the new, combined company would be named Union Pacific and would have a total value of more than $250 billion.

The combined company would have over 50,000 miles of railroad track, connecting 43 states and about 100 ports. This would create a single company that can move goods from the East Coast to the West Coast without needing to transfer cargo to another railroad.

“The railroads, as strong as they are and as healthy as they are, the reality is that they’ve been losing market share to their competitors, to trucks, for many years.”
— @RailwayAge editor @WvantuonoC on the merger of Union Pacific and Norfolk Southern.

Key benefits of the merger

Improved service: The new, single railroad would offer faster and more reliable shipping for customers. By not having to switch cargo between two different companies, shipping times would be shorter.

Economic growth: The companies believe the merger would help strengthen American manufacturing and create new jobs. It would also help the U.S. compete better with Canadian railroads.

Shareholder value: The companies expect to save about $2.75 billion a year through this merger, which would create more than $30 billion in value for shareholders over time.

Job preservation: Both companies have stated that they intend to preserve union jobs.

Important details and next steps

  • Union Pacific will be the main company, and its headquarters will remain in Omaha, Nebraska. The Norfolk Southern headquarters in Atlanta, Georgia, will continue to be an important office for the new company.

  • The merger must be reviewed and approved by the Surface Transportation Board (STB), a government agency that oversees railroads. The companies plan to submit their application for approval within the next six months.

  • The deal is also subject to approval from the shareholders of both companies.

  • Some groups, including a major rail union, have expressed concerns about the merger's potential impact on competition, safety, and workers.

  • If the merger is approved, the companies expect the deal to be finalized by early 2027.

Key details

Here is a breakdown of the key details of this proposed merger between Union Pacific and Norfolk Southern.

Deal structure

  • Union Pacific is acquiring Norfolk Southern in a cash-and-stock deal. Norfolk Southern shareholders will receive 1.0 Union Pacific share and $88.82 in cash for every share they own, valuing Norfolk Southern at $320 per share—a 25% premium over its 30-day average before merger discussions became public.

  • Norfolk Southern shareholders will own about 27% of the combined company.

Scale and reach

  • The combined enterprise will control more than 50,000 miles of track across 43 states, linking approximately 100 ports and connecting the Atlantic and Pacific coasts.

  • This will be the country’s only single-company coast-to-coast freight rail operator, able to seamlessly move goods from places like New Jersey’s ports to the ports of California.

Leadership and headquarters

The merged company will be led by Union Pacific CEO Jim Vena (committed for at least five years) and be headquartered in Omaha, Nebraska. Atlanta, Georgia will remain an important operational and innovation hub.

Economics

  • The merger implies a combined enterprise value exceeding $250 billion.

  • Based on 2024 data, the new company would have about $36 billion in revenue, $18 billion in EBITDA, a 62% operating ratio, and $7 billion in free cash flow annually.

  • Expected annual synergies are around $2.75 billion.

Impact and rationale

  • The merger is touted as transformational for U.S. manufacturing, logistics, and export-import supply chains.

  • Executives say it should enhance shipping speed, optimize routes, and improve reliability for industries ranging from agriculture to automotive and consumer goods.

Labor and regulation

  • Rail labor unions, notably SMART-TD, oppose the merger, raising concerns about Union Pacific’s labor practices, potential job cuts, and service disruptions.

  • The deal will face intense regulatory scrutiny from the Surface Transportation Board and antitrust authorities—a process expected to take until early 2027 to finalize.

Industry effects

  • This megamerger may prompt further industry consolidation, with rivals such as BNSF (owned by Berkshire Hathaway) and CSX under pressure to respond, possibly leaving only two or three major freight railroads operating nationwide.

  • If approved and completed, this will be the largest merger in rail industry history and mark a significant shift in how freight moves across the United States.

Further reading

To dive deeper into this topic, we recommend the following resources:

Shawn Geddes
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