Union Pacific, Norfolk to merge, create America's first coast-to-coast railroad: What to know
The deal, valued at $85 billion, plans to connect 50,000 miles of tracks spanning across 43 states and the District of Columbia.
The leaders hailing the project on Tuesday suggested it would dramatically transform the way supplies are transported across the country.
'Railroads have been an integral part of building America since the Industrial Revolution, and this transaction is the next step in advancing the industry,' Jim Vena, Union Pacific's CEO, said in a statement.
'Imagine seamlessly hauling steel from Pittsburgh, Pennsylvania to Colton, California and moving tomato paste from Huron, California to Fremont, Ohio. Lumber from the Pacific Northwest, plastics from the Gulf Coast, copper from Arizona and Utah, and soda ash from Wyoming,' he added.
'Right now, tens of thousands of railroaders are moving almost everything we use. You name it, and at some point, the railroad hauled it.'
What's the timeline?
The two companies are planning to submit an application with the Surface Transportation Board (STB) in six months. Union Pacific and Norfolk Southern are tracking a finalized transaction by early 2027, according to a release.
Each entity will continue independent management until the deal is closed. Company operations are headquartered in Omaha, Neb., while Atlanta will serve as a long-term project hub.
What's the financial breakdown?
Union Pacific is expecting to boost its company value to $30 billion while reaping in $2.75 billion annually.
The company is offering Norfolk Southern shareholders $88.82 in cash per share and one Union Pacific share to complete the deal.
Norfolk Southern shareholders will maintain 27 percent ownership in the combined company.
The combined company will be without a voting trust and includes a $2.5 billion reverse termination fee.
What will happen to workers?
Union Pacific said every union employee who wants a job in the combined company will have one in their Tuesday release.
'Our safety, network, and financial performance is among the best we've had as a company, as is our customer satisfaction. And it is from this position of strength that we embark on this transformational combination,' said Norfolk Southern CEO Mark George.
'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 added.
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