Union Pacific, Norfolk Southern Merge to Create First Transcontinental Railroad

The $85 billion deal aims to strengthen the U.S. supply chain, boost manufacturing, and spur economic growth while preserving union jobs.

Shipping containers at the Union Pacific Railroad intermodal facility in Commerce, Calif., on April 16, 2025. Frederic J. Brown/AFP via Getty Images

Union Pacific Corp. and Norfolk Southern Corp. are now officially merging to create the nation’s first transnational railroad.

The new entity will connect more than 50,000 route miles across 43 states, from the East Coast to the West Coast, linking approximately 100 ports and reaching nearly every corner of North America, the companies said. The merger aims to better integrate the U.S. supply chain, boost American manufacturing, and create new sources of economic growth and workforce opportunities that preserve union jobs.

The deal comes at a time when the United States is trying to reverse a trend of overseas outsourcing of manufacturing, bringing factories and jobs back to America.

“Railroads have been an integral part of building America since the Industrial Revolution, and this transaction is the next step in advancing the industry,” Union Pacific CEO Jim Vena said in a statement on July 29.

“Imagine seamlessly hauling steel from Pittsburgh, Pennsylvania, to Colton, California, and moving tomato paste from Heron, California, 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 announcement of the merger coincided with the release of Norfolk Southern’s second-quarter financial results. Revenue for the quarter was $3.1 billion, while income from railway operations totaled $1.2 billion, resulting in an operating ratio of 62.2 percent. Diluted earnings per share came in at $3.41.

“This quarter, Norfolk Southern delivered another set of strong results—growing volumes, managing costs, and delivering 8 percent [earnings per share] growth. While we remain clear-eyed about market uncertainty, our performance reflects the strength of our strategy and our ability to continue disciplined execution, relentless focus on safety and seamless customer service,” President and CEO Mark George said.

Shares of both companies fell sharply in early morning trading on July 29 after the announcement of the merger. By market close, Union Pacific shares were down 2.39 percent, while Norfolk Southern shares were down 3.04 percent.

One sticky issue for stockholders is the terms of the merger deal, with Union Pacific paying for the acquisition of Norfolk Southern in both stock and cash, valuing Norfolk Southern at $320 per share based on Union Pacific’s unaffected closing stock price on July 16.

That would represent a 25 percent premium to Norfolk Southern’s 330-trading-day volume weighted average price on July 16, which implies an enterprise value of $85 billion for Norfolk Southern, resulting in the creation of a combined enterprise of more than $250 billion.