The merger that will create the country’s largest railroad company
Fact Brief: What is the Norfolk Southern-Union Pacific merger all about?
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.
Here are the key details:
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
“Union Pacific and Norfolk Southern to Create America’s First Transcontinental Railroad”. Union Pacific press release (7/29/25)
“Union Pacific, Norfolk Southern merge creating first US transcontinental railroad”. Fox Business (7/29/25)
“Union Pacific to Acquire Norfolk Southern for $72 Billion” - on YouTube. Bloomberg Podcasts (7/29/25)
“A Megamerger Creates America’s First Coast-to-Coast Rail Operator”. Wall Street Journal (7/29/25)