Union Pacific–Norfolk Southern Merger Sets Stage for First Transcontinental US Railroad

Norfolk Southern

The Union Pacific–Norfolk Southern merger will create the first transcontinental US railroad. Union Pacific agreed to acquire Norfolk Southern in an $85bn deal. The carriers say the Union Pacific–Norfolk Southern merger will link 50,000 miles of track across 43 states and about 100 ports.

What the merger builds — scale, savings, and leadership

The combined entity targets $2.75bn a year in savings. Using 2024 results, revenue would be about $36bn. UP chief executive Jim Vena will lead the company and commit to at least five years. Meanwhile, the railroads expect every union worker to have a job opportunity. The Union Pacific–Norfolk Southern merger aims to “transform the US supply chain.”

Why regulators matter — the STB’s higher bar

The Surface Transportation Board will apply post-2001 merger rules. Therefore, the partners must show the deal enhances competition. They plan to file within six months, seeking approval to close by early 2027. Analysts expect scrutiny above prior deals. However, the carriers argue the new network improves options in the Ohio and Mississippi river valleys.

The network promises seamless, faster service by eliminating handoffs. As a result, shippers could gain days on transit times. The carriers also position the new company to compete with Canadian Pacific Kansas City. The 2023 CP-KCS deal cost $31bn, much smaller than today’s proposal. The Union Pacific–Norfolk Southern merger would create a $250bn rail enterprise.

Under the agreement, Norfolk Southern shareholders get one UP share plus $88.82 in cash per share. UP now serves 23 western states and NS 22 eastern states. Together, they say the railroad advances Lincoln’s transcontinental vision while “winning back US freight volume.”

The Metalnomist Commentary

Regulatory risk is the swing factor, given the STB’s “enhance competition” standard. If approved, the coast-to-coast reach could shift freight from trucks, tighten intermodal pricing, and reset service benchmarks across US manufacturing corridors.