Union Pacific and Norfolk Southern's $85 billion merger clears a regulatory hurdle
Federal regulators let the proposed tie-up move forward after rejecting an earlier bid to combine the two railroads
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Chart: UNP, one-minute prices, three sessions
Union Pacific and Norfolk Southern are pursuing an $85 billion merger that would combine two of the largest railroads in the United States. Under the terms, Norfolk Southern shareholders would receive one Union Pacific share plus $88.82 in cash for each share they hold, Norfolk Southern said in a release, valuing the deal at $320 per share. Union Pacific said that price is a 25% premium to Norfolk Southern's 30-day volume weighted average share price as of July 16, 2025.
The companies say the combined enterprise would be worth more than $250 billion and would operate a network spanning more than 50,000 route miles across 43 states, linking roughly 100 ports in North America, according to Union Pacific. They project $2.75 billion in annual synergies within three years, split between $1.75 billion in revenue growth and $1 billion in cost savings, Trains magazine reported.
The Surface Transportation Board rejected the companies' first application in January 2026, saying it was incomplete and needed deeper analysis of congestion, commodity impact and pricing, Fortune reported. As of September 21, federal regulators had cleared the revised plan to continue, despite objections from groups including the American Farm Bureau Federation, Michigan Farm News reported. Union Pacific and Norfolk Southern have told regulators they are willing to divest stakes in some smaller railroads as part of the deal, Reuters reported.
If completed, the merger would create the largest railroad in U.S. history, with control over close to half of the country's rail traffic, Michigan Farm News reported. Union Pacific has said it will walk away if regulators impose broad trackage rights or line sales as a condition of approval, though it would then owe Norfolk Southern a $2.5 billion breakup fee, Yahoo Finance reported. Either company can terminate the agreement if it has not closed by January 28, 2028, or if the Surface Transportation Board or a court issues a final ruling blocking it.