Railroad company Union Pacific will buy Norfolk Southern in a cash and stock transaction valued at $85 billion, combining two of the largest rail operators in the nation.
The merger will combine Union Pacific’s Western, Midwestern, and Southern railroad portfolio with Norfolk Southern’s extensive East Coast network. As part of the deal, Norfolk Southern shareholders will obtain one Union Pacific share and $88.82 in cash for each Norfolk share.
The sides aim to close the deal by 2027.
Union Pacific CEO Jim Vena told employees that the merger should create jobs and preserve union jobs. “Realizing the promise of the Union Pacific Transcontinental Railroad will not be easy,” Vena said in a letter obtained by Bloomberg.
“It is our expectation that the combination will lead to job growth and it is our intention to preserve Union Pacific and Norfolk Southern union jobs,” he added.
Norfolk Southern CEO Mark George said in a statement announcing the first transcontinental railroad that the merger is a “transformational combination.”
“We are confident that the power of Norfolk Southern’s 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 said.
“Union Pacific is a true partner that shares our belief in rail’s ability to deliver for all stakeholders simultaneously, and we are excited for our future together,” he added. Vena said it was the “next step in advancing the industry.”
At current stock levels, the companies would have a market value of about $200 billion.
However, the two companies will still need regulatory approval for the massive merger. The industry hopes that President Donald Trump will be more friendly to such deals than his predecessor.
“A deal is far from complete, as it will face stiff scrutiny by the Surface Transportation Board and other regulators, even under a particularly pro-business Trump administration,” said Lee Klaskow, Bloomberg’s transportation senior industry analyst. “If the deal were to get their blessings, it would likely come with concessions.”
A June WilmerHale analysis showed the Trump administration is expected to continue the Biden administration’s aggressive antitrust approach.
“At the start of President Trump’s second term, there was considerable speculation about a significant ideological shift at the FTC and DOJ, with the new leadership revoking guidelines and policies that the antitrust agencies enacted during the Biden Administration,” the firm wrote. “That has not happened.”
But CBS reported that two antitrust officials had been ousted from the Department of Justice on Monday over insubordination. The ousters came after infighting concerning the decisions on mergers that the antitrust division had reached, and the considerable back-and-forth between officials before agreement had been reached.
NORFOLK SOUTHERN AND UNION PACIFIC CONFIRM MERGER TALKS
If a Union Pacific and Norfolk Southern merger is completed, it would become the largest rail operator by market cap in North America, with a nearly $200 billion value as of July 2025.
The next closest competitors would be Canadian Pacific Railway, with a market cap of around $60 billion, and CSX Corporation, with a market cap of about $67 billion.