Union Pacific (UNP.US) Confirms Acquisition of Norfolk Southern (NSC.US) to Build America's First Transcontinental Railroad Network
We have learned that Union Pacific (UNP.US) and Norfolk Southern (NSC.US) have announced an agreement to form a combined railroad transportation network across the United States. The two companies say that the merged system will seamlessly connect over 5,000 miles of operating lines in 43 states from coast to coast, passing through approximately 100 major ports, covering nearly all regions of North America. This merger is expected to reshape America's supply chain, unleash American manufacturing's industrial potential, and create new economic growth sources and job opportunities while ensuring stable labor positions.
According to the agreement terms, Union Pacific will acquire Norfolk Southern through a stock-and-cash transaction at an exchange ratio calculated based on Union Pacific's unaffected closing price as of July 16, 2025. The value of each Norfolk Southern share is estimated at $320 per share. Based on this calculation, Norfolk Southern's enterprise value is approximately $85 billion, and the combined company's total value will exceed $25 billion.
Shareholders of both companies are expected to benefit significantly from this transaction, including through annual synergy opportunities valued at around $275 million, resulting in a potential increase in value of over $3 billion.
Based on 2024 financial data, the combined company's revenue is estimated to be approximately $36 billion, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is around $18 billion, and the operating ratio is 62%. Free cash flow is approximately $7 billion. The transaction is expected to enhance Union Pacific's adjusted earnings per share starting in the second full year after completion and will gradually increase to high double-digit levels.
The two railroad companies plan to submit their application to the Surface Transportation Board within six months, at which time they will provide detailed explanations of how the combined network will offer safer, more efficient, and reliable transportation services for all stakeholders while enhancing industry competitiveness.