Historic Railway Merger connects Union Pacific and Norfolk Southern Truck

Union Pacific Corporation and Norfolk Southern Corporation On Tuesday, it created the first US cross-sectional continental railroad and announced a merger agreement for more than 50,000 routes from coast to coast.

Union Pacific will acquire Norfolk Southern for $320 per share in cash and inventory transactions. The offer is based on a stock price that was not affected by Union Pacific on July 16th, representing a 25% premium over Norfolk Southern’s 30-day volume weighted average price as of that day.

Ticker	safety	last	change	change %
UNP	Union Pacific Corp.	229.24	+4.50	+2.00%
NSC	Norfolk Southern Corporation.	286.42	+4.04	+1.43%

The deal values Norfolk Southern at $85 billion, but the total company is worth more than $250 billion.

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If approved, this marks one of the largest rail mergers in US history. It is also the first time a single company has managed rail freight from the East Coast to the West Coast. The companies touted that the merger not only reshaping the US logistics landscape, but also boosting US manufacturing on a massive scale and promoting economic growth and job creation while simultaneously maintaining union jobs.

Companies also believe that the railroad will help the US compete more effectively with Canadian railroads, with the goal of regaining US freight volume and regaining US employment.

It will also take on rival BNSF, owned by Warren Buffett’s Berkshire Hathaway.

Currently, US freight rail transports approximately 1.5 billion tonnes of goods each year.

“The railway was an integral part of the matter. Building America since the Industrial Revolution, this transaction is the next step in moving the industry forward,” said Jim Bena, CEO of Union Pacific, in a statement. Wood in the Pacific Northwest, plastic from the Gulf Coast, copper in Arizona and Utah, and soda ash in Wyoming. ”

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The companies also said that by eliminating delays in exchanges, opening new routes, expanding intermodal services, and reducing distances and transit times along major rail corridors, the transcontinental railroad will provide faster and more comprehensive freight services to U.S. shippers. It is also expected to reduce highway congestion and reduce wear on taxpayer-funded roads.

The company said all union members, including train crews, mechanical and engineering workers, will have opportunities in the merged entities. Given the expected growth in rail volume, there will also be additional employment opportunities in towns and cities that combine rail networks, the companies said.

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“This combination is transformative and strengthens the best cargo transport system in the world. It’s a victory for the American economy, a victory for our customers, a victory for our people,” Vena said.

Boards of both Union Pacific and Norfolk Southern Unanimously approved the transactionit is subject to review and approval of the Surface Transport Commission within statutory timelines, customary closure conditions, and shareholder approval.

The company plans to submit an application to the Surface Transportation Commission within six months. The company aims to close trades by early 2027.