Union Pacific to acquire Norfolk Southern in $85 billion deal

Union Pacific Corporation (NYSE: UNP) announced it will acquire Norfolk Southern Corporation (NYSE: NSC) in a stock and cash transaction valued at $85 billion, according to a press release from the companies.

Under the agreement, Norfolk Southern shareholders will receive 1.0 Union Pacific common share and $88.82 in cash for each Norfolk Southern share, implying a value of $320 per share. This represents a 25% premium to Norfolk Southern's 30-trading day volume weighted average price on July 16, 2025.

The transaction would create a combined enterprise valued at over $250 billion. Union Pacific will issue approximately 225 million shares to Norfolk Southern shareholders, representing 27% ownership in the combined company.

The companies expect to file their application with the Surface Transportation Board within six months and target closing the transaction by early 2027, subject to regulatory approval and shareholder approval.

Jim Vena will continue as CEO of the combined company and has committed to remain for at least five years. The combined company will be headquartered in Omaha, Nebraska, with Atlanta remaining a core location for operations.

Based on 2024 results, the combined company would have revenues of approximately $36 billion and EBITDA of approximately $18 billion. The transaction is expected to generate approximately $2.75 billion in annualized synergies.

The cash portion will be funded through new debt and balance sheet cash. At closing, the combined business will have a debt-to-EBITDA ratio of approximately 3.3x.

Both companies' boards unanimously approved the transaction. The agreement includes a $2.5 billion reverse termination fee and is structured without a voting trust.

The companies will host a conference call on July 29 at 8:30 a.m. Eastern Time to discuss the announcement.

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