Latest news with #transcontinental
Yahoo
8 hours ago
- Business
- Yahoo
Union Pacific to Buy Norfolk Southern for $85 Billion
Union Pacific agrees to buy Norfolk Southern in a cash-and-stock transaction valued at $85 billion. The companies would combine to create a transcontinental railroad. The deal is expected to close in 2027, but there are antitrust hurdles to clear. Lee Klaskow of Bloomberg Intelligence is on "Bloomberg Open Interest."
Yahoo
9 hours ago
- Business
- Yahoo
Union Pacific to acquire Norfolk Southern to create first transcontinental railroad in US
Union Pacific has signed an agreement to acquire Norfolk Southern in a stock and cash transaction, at an enterprise value of $85bn, which will result in a combined enterprise worth over $250bn. This strategic move will create the first modern transcontinental railroad in the US, seamlessly connecting over 50,000 route miles (80,467km) across 43 states and linking approximately 100 ports. The two companies recently confirmed discussions regarding the merger, while insisting that no guarantees could be made about the finalisation of any agreement. This combination is expected to transform the US supply chain and generate new avenues for economic growth and workforce opportunities while safeguarding union jobs. Shareholders of Norfolk Southern will receive one Union Pacific common share and $88.82 in cash for each share they hold in Norfolk Southern. The acquisition values Norfolk Southern at $320 per share, a 25% premium over its recent average price. Union Pacific is set to issue around 225 million shares to Norfolk Southern shareholders, which will account for 27% ownership in the merged entity on a fully diluted basis. This arrangement allows Norfolk Southern shareholders to benefit from the growth opportunities and synergies of the combined company. The agreement is designed without a voting trust and incorporates a reverse termination fee of $2.5bn. The transaction, approved by both companies' boards, is subject to Surface Transportation Board review and shareholder approval, with a target closing by early 2027. Union Pacific CEO Jim Vena said: 'Railroads have been an integral part of building America since the Industrial Revolution, and this transaction is the next step in advancing the industry.' The merged entity will offer quicker and more extensive freight services to US shippers by minimising interchange delays, introducing new routes, enhancing intermodal services, and shortening distances and transit times on crucial rail corridors. This will provide a more truck-competitive solution, reduce highway congestion, and support annual infrastructure investments of approximately $5.6bn. Additionally, the workforce will benefit from protected and expanded job opportunities, with union employees having job security and the possibility of additional employment due to expected rail volume growth. Communities will also see continued investment in safety and development initiatives, with a goal of zero incidents. Furthermore, the transaction promises significant shareholder value, with more than $30bn of potential value creation expected from synergies. Norfolk Southern CEO Mark George said: '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.' Morgan Stanley & Co and Wells Fargo are financial advisors to Union Pacific, with Skadden, Arps, Slate, Meagher & Flom and Covington & Burling providing legal advice. BofA Securities advises Norfolk Southern, with Wachtell, Lipton, Rosen & Katz and Sidley Austin as legal counsel. "Union Pacific to acquire Norfolk Southern to create first transcontinental railroad in US" was originally created and published by Railway Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNN
2 days ago
- Business
- CNN
America's first transcontinental freight railroad is planned after a megamerger
FacebookTweetLink Two of the largest US railroads, Union Pacific (UNP) and Norfolk Southern (NS), announced on Tuesday a plan to combine in a $72 billion deal that would create America's first transcontinental freight railroad. This is a developing story. It will be updated.
Yahoo
2 days ago
- Business
- Yahoo
Union Pacific announces bid for Norfolk Southern to create transcontinental railroad
OMAHA, Neb. (AP) — Union Pacific is seeking to buy Norfolk Southern in a deal valued at $85 billion in a merger that could trigger the final wave of railroad mergers across the country. The merger would create the first transcontinental railroad in the United States worth more than $200 billion. The railroads said the tie-up would streamline deliveries of raw materials and goods across the country. Any deal would be closely scrutinized by antitrust regulators that have set a very high bar for railroad deals after previous consolidation in the industry led to massive backups and snarled traffic. But if the deal is approved, the two remaining major American railroads — BNSF and CSX — will face tremendous pressure to merge so they can compete. The continent's two other major railroads — Canadian National and CPKC — may also get involved. Union Pacific CEO Jim Vena, who has been championing the potential benefits of a rail merger, said this deal could make it possible for lumber from the Pacific Northwest and plastics produced on the Gulf Coast and steel made in Pittsburgh to all reach their destinations more seamlessly. 'Railroads have been an integral part of building America since the Industrial Revolution, and this transaction is the next step in advancing the industry,' Vena said. Josh Funk, The Associated Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CTV News
2 days ago
- Business
- CTV News
Union Pacific to buy Norfolk in US$85 billion mega U.S. railroad deal
Union Pacific said on Tuesday it would buy smaller rival Norfolk Southern in an US$85 billion deal, to create the nation's first coast-to-coast freight rail operator and reshape the movement of goods from grains to autos across the country. If approved, the deal would combine Union Pacific's stronghold in the western two-thirds of the U.S. with Norfolk's 19,500 mile network that primarily spans 22 eastern states. This would mark the largest-ever buyout in the sector, merging Union Pacific, the biggest U.S. railroad operator, with Norfolk, one of the top players, granting the combined company transcontinental dominance. On Thursday, the two companies had said they were in advanced discussion for a possible merger. The transaction faces numerous regulatory hurdles and will serve as a key test of the changed thinking around antitrust issues under U.S. President Donald Trump. Since early 2025, the U.S. Surface Transportation Board, the federal regulatory agency overseeing railroads, has signalled a more industry-friendly approach to merger reviews. Chairman Patrick Fuchs, appointed to the post in January by Trump, has advocated for faster timelines for preliminary assessments, a greater focus on competitive balance rather than blocking consolidation, and a willingness to enforce conditions post-merger rather than deny deals preemptively. The talks have also prompted competitors BNSF, owned by Berkshire Hathaway, and CSX, to explore merger options, people familiar with the matter said. Union Pacific's deal for Norfolk would also need support from labor unions and could invite scrutiny from several other federal agencies. Major railroad unions have long opposed consolidation, arguing that such mergers threaten jobs and risk disrupting rail service. The North American rail industry has been grappling with volatile freight volumes, rising labour and fuel costs, and growing pressure from shippers over service reliability, factors that could further complicate the merger. The last major deal in the industry was the $31 billion merger of Canadian Pacific and Kansas City Southern, which created the first and only single line rail network connecting Canada, the U.S., and Mexico. That deal, finalized in 2023, faced heavy regulatory resistance over fears it would curb competition, cut jobs, and disrupt service, but it was ultimately approved. (Reporting by Shivansh Tiwary and Sabrina Valle, additional reporting by Abhinav Parmar and Mariam Sunny. Editing by Sriraj Kalluvila)
