Latest news with #NorfolkSouthern
Hindustan Times
2 hours ago
- Business
- Hindustan Times
Union Pacific to acquire Norfolk Southern in $85 billion deal to create 1st coast-to-coast US freight railroad
Union Pacific has confirmed that it will acquire Norfolk Southern in a massive $85 billion deal: the largest in the history of the United States railroad industry. The combined company, to be called Union Pacific Transcontinental Railroad, would create the nation's first coast-to-coast freight network reshaping how goods move across the US, The New York Times reported. Union Pacific has reached an agreement to purchase Norfolk Southern in a $85 billion deal.(Getty Images via AFP) Union Pacific, dominant in the West, and Norfolk Southern, with a vast 19,500-mile network across the East will merge to form a 50,000-mile network which spans across 43 states. The companies project $2.75 billion in annualized synergies with a combined enterprise value of $250 billion. The purchase price, $320 per share, represents an 18.6 per cent premium over Norfolk Southern's stock as of July 17, when merger talks first emerged, Reuters reported. Also Read: Data of nearly 14 Lakh Americans exposed in massive insurance company hack: Report Regulatory scrutiny and labor pushback While the deal offers efficiency gains and logistical streamlining, it is expected to face intense scrutiny from the Surface Transportation Board (STB), especially as major labor unions voice strong opposition. Jeremy Ferguson, president of the SMART-TD union, North America's largest rail union, claimed that the merger is not good for labor and the rail shipper/customer, or the public. He said that it could lead to job losses, rate hikes, and service disruptions, referencing issues following the 1996 Union Pacific-Southern Pacific merger, according to Al Jazeera. Even under expedited review, STB approval could take 19 to 22 months. The companies aim to file with the board within six months and expect to close the merger by early 2027, NYT report states. Industry ripple effects and competitive pressure The merger has sparked competitive pressure on other rail giants. According to Al Jazeera, BNSF, owned by Berkshire Hathaway, and CSX are exploring merger options in response. If both megamergers proceed, Class I railroads in North America will shrink from six to four, consolidating nearly 90 per cent of the US rail freight capacity. The last major deal in the sector, Canadian Pacific and Kansas City Southern's $31 billion merger, faced similar concerns before being approved in 2023. Also Read: 'US was designed to take your money': American man explains why he won't return home Operational and historical significance Union Pacific's CEO Jim Vena said railroads were an integral part of America's development since the Industrial Revolution and the merger was the next step in advancing the industry. The combined railroad would employ over 50,000 workers, 80 per cent of whom are unionized. Analysts believe it could resolve longstanding issues like rail freight bottlenecks in Chicago by enabling seamless transcontinental routes via St Louis or Memphis. Meanwhile, some experts have argued that competition from trucking and intermodal logistics could limit the merged firm's pricing power. FAQs What railroads merged with Union Pacific in the past? Union Pacific previously merged with Southern Pacific in 1996, a deal that initially caused service disruptions and congestion. Is Union Pacific buying Norfolk Southern? Yes, Union Pacific announced on July 29, 2025, its $85 billion acquisition of Norfolk Southern. What happened to the Union Pacific Railroad company? It remains a major US freight rail operator. This new deal aims to make it the first to operate a unified coast-to-coast network. Will the merger affect shippers and consumers? Shippers worry about higher rates and less competition. Regulators will assess these impacts before approving the merger.
Business Times
3 hours ago
- Business
- Business Times
US: Stocks retreat ahead of Fed decision, big tech earnings
[NEW YORK] Wall Street stocks retreated on Tuesday as markets digested major merger announcements and monitored US-China trade talks ahead of big tech earnings later in the week. Representatives from Beijing and Washington signaled further talks were likely following a round of negotiations in Stockholm. But a top US trade official stressed that President Donald Trump would make any 'final call.' Meanwhile investors digested several significant earnings reports, as well as merger announcements in the rail and energy sectors ahead of major economic news catalysts later in the week. 'After reaching all time highs, markets are going to take a wait and see attitude,' said Art Hogan of B. Riley Wealth Management. The Dow Jones Industrial Average finished down 0.5 per cent at 44,632.99. The broad-based S&P 500 shed 0.3 per cent to 6,370.86, while the tech-rich Nasdaq Composite Index declined 0.4 per cent to 21,098.29. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Both the S&P 500 and Nasdaq had finished at records on Monday. Steve Sosnick of Interactive Brokers described Tuesday's activity as a 'little bit of position squaring ahead of a potentially very volatile few days.' Besides earnings from Apple, Facebook parent Meta and other tech giants, markets will absorb a Federal Reserve interest rate decision. The central bank is expected to keep rates unchanged, but could hint that an interest rate cut will be more likely in September. Trump has lambasted Fed Chair Jerome Powell for not cutting interest rates. The market will also receive key economic reports on the labor market, inflation and US growth. Among companies reporting earnings on Tuesday, Boeing dropped 4.3 per cent, UnitedHealth Group sank 7.4 per cent and Whirlpool dived 13.4 per cent Union Pacific announced it will be acquiring Norfolk Southern for US$85 billion, creating a transcontinental railroad intended to boost freight rail efficiency. Union Pacific fell 2.3 per cent while Norfolk Southern fell 3.0 per cent. Analysts expect the deal to encounter regulatory scrutiny. Oil services company Baker Hughes said it would acquire Chart Industries for US$13.6 billion, adding assets in natural gas, data centres and decarbonisation. Baker Hughes dropped 1.7 per cent while Chart surged 15.8 per cent. CyberArk Software surged 13.5 per cent following a report it was in talks to be acquired by Palo Alto Networks in a merger of cybersecurity ventures. Palo Alto fell 5.2 per cent. AFP
Wall Street Journal
4 hours ago
- Business
- Wall Street Journal
A Railroad Merger Test for the Feds
Corporate mergers aren't popular in this anti-business political age, but a proposed tie-up of two major carriers could boost competition for coast-to-coast shipping. This will be a test of common sense for the Trump Administration, and beware a union shakedown along the way. Two of the six largest U.S. rail freight carriers, Union Pacific and Norfolk Southern, on Tuesday announced a long-mooted plan for an $85 billion merger. The deal would create the largest U.S. rail carrier by far, and the first with the ability to run trains between the East and West coasts without renting access from a regional competitor. Union Pacific would link its Western network with Norfolk Southern's in the East, reducing Midwestern bottlenecks and the time and cost for long-haul transport.
CNBC
4 hours ago
- Business
- CNBC
Nucor CEO on earnings: Tariff impact was minimal and demand drivers remain robust
Leon Topalian, Nucor CEO, joins 'Closing Bell: Overtime' to discuss the company's latest quarterly earnings results, the proposed merger between Union Pacific and Norfolk Southern and much more.
Yahoo
5 hours ago
- Business
- Yahoo
Union Pacific and Norfolk Southern reach $85 billion merger deal
Union Pacific and Norfolk Southern today announced an $85 billion deal to tie their networks together and create the first U.S. transcontinental railroad. The merged company — which will be called Union Pacific — will transform the U.S. supply chain and economy, strengthen domestic manufacturing, and preserve all union jobs, the railroads said. UP will acquire NS in a stock and cash transaction that values NS at $320 per share, a 25% premium. The combined company would have an enterprise value of more than $250 billion. The railroads said the merger would create $2.75 billion in annual synergies within three years, through a combination of $1.75 billion in revenue growth and $1 billion in cost savings. 'Railroads have been an integral part of building America since the Industrial Revolution, and this transaction is the next step in advancing the industry,' UP Chief Executive Jim Vena said. 'Imagine seamlessly hauling steel from Pittsburgh, Pennsylvania to Colton, Calif., and moving tomato paste from Heron, Calif., to Fremont, Ohio. Lumber from the Pacific Northwest, plastics from the Gulf Coast, copper from Arizona and Utah, and soda ash from Wyoming. Right now, tens of thousands of railroaders are moving almost everything we use. You name it, and at some point, the railroad hauled it.' The railroad will stretch 52,215 route miles, with track winding through 43 states from the East Coast to the West Coast and serving around 100 ports. The combined company will deliver faster, more comprehensive freight service to U.S. shippers by eliminating interchange delays, opening new routes, expanding intermodal services, and reducing distance and transit time on key rail corridors, the railroads said. The merged Union will shift freight to rail, reducing congestion and wear and tear on taxpayer funded highways, they added. 'Norfolk Southern, like Union Pacific, is a railroad integral to the U.S. economy, with a storied 200-year legacy of serving customers across 22 states in the eastern half of the nation,' NS CEO Mark George said in a statement. '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. 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. 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.' Vena, who will be CEO of the combined railroad, invoked President Abraham Lincoln, who created the Union Pacific in 1862 with the signing of The Pacific Railroad Act. 'This combination is transformational, enhancing the best freight transportation system in the world – it's a win for the American economy, it's a win for our customers, and it's a win for our people,' Vena said. 'It builds on President Abraham Lincoln's vision of a transcontinental railroad from nearly 165 years ago and advances our Safety, Service and Operational Excellence Strategy. I am confident this historic transaction will enhance competition to benefit customers, communities, and employees while delivering shareholder value.' Creating the transcontinental version of Union Pacific is overwhelmingly in the public interest, the railroads said, and will enhance competition, consistent with the test that will be applied in the review of the transaction by the Surface Transportation Board. The companies expect to file their application with the STB within six months, in which the companies will describe how the combined rail network will provide safer, faster, and more reliable service and increased competition. A pre-filing notification of intent to file an application could come as soon as Wednesday, and is the first official step in the merger evaluation timeline. Both eastern carrier CSX (NASDAQ: CSX), and reported possible merger partner, Fort Worth-based BNSF, had no comment. 'The intermodal freight supply chain thrives when it offers a competitive alternative to long-haul trucking,' said Anne Reinke, president and chief executive of the Intermodal Association of North America, in an email statement to FreightWaves. 'It succeeds where there are strong efficiencies, a focus on growth, and a commitment to customer service. As this merger moves forward, we will be looking for these core values to be reinforced.' Norfolk Southern and CSX serve the Port of Savannah, the fourth-busiest U.S. container port, which loads 42 intermodal trains per week. A spokesman for the Georgia Ports Authority said, 'We are following the [merger] situation. It's business as usual here at the port with our rail operations.'The board of directors of both Union Pacific and Norfolk Southern unanimously approved the transaction, which is subject to STB review and approval within its statutory timeline, customary closing conditions, and shareholder approval. The companies are targeting closing the transaction by early 2027. The deal includes a $2.5 billion reverse termination fee. They do not plan to use a voting trust, a common maneuver in prior rail mergers that allows the shareholders of the target railroad to cash out while the deal is under regulatory review. The STB rejected a voting trust in Canadian National's (NYSE:CNI) ill-fated attempt to acquire Kansas City Southern under the board's tougher 2001 merger review rules. The combined company will be headquartered in Omaha, Neb., which has long been UP's home base. The NS headquarters in Atlanta will remain a core location over the long-term, with a focus on technology, operations, and innovation, among other priorities, the railroads said. This article was updated July 29 to add statements from the Intermodal Association of North America and the Georgia Ports Authority. Subscribe to FreightWaves' Rail e-newsletter and get the latest insights on rail freight right in your Pacific and Norfolk Southern reach $85 billion merger deal First look: Norfolk Southern earnings Bill aims to prioritize rail freight, untangle congestion Union Pacific expands domestic intermodal service The post Union Pacific and Norfolk Southern reach $85 billion merger deal appeared first on FreightWaves. 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