Today, Union Pacific Corporation and Norfolk Southern Corporation announced an $85-billion agreement to create America’s first transcontinental railroad.
The company’s deal plans to connect over 50,000 route miles across 43 states from the East Coast to the West Coast, linking approximately 100 ports and nearly every part of North America.
According to a joined press release, “This combination will transform the U.S. supply chain, unleash the industrial strength of American manufacturing, and create new sources of economic growth and workforce opportunity that preserves union jobs.”
Union Pacific and Norfolk Southern have vowed to invest approximately $5.6 billion annually in infrastructure, innovation, and network expansion, to deliver a more truck-competitive solution, decrease highway congestion, reducing wear-and-tear on taxpayer-funded roads.
Under the terms of the agreement, Union Pacific will acquire Norfolk Southern through a stock and cash transaction, valuing Norfolk Southern at $320 per share. This per-share valuation implies an enterprise value of $85 billion for Norfolk Southern, leading to the formation of a combined enterprise worth over $250 billion.
Jim Vena, CEO of Union Pacific told investors, “Railroads have been an integral part of building America since the Industrial Revolution, and this transaction is the next step in advancing the industry. 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.”
Mark George, CEO of Norfolk Southern stated, “Norfolk Southern, like Union Pacific, is a railroad integral to the U.S. economy, with a storied 200-year legacy of serving customers across 22 states in the eastern half of the nation. 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.”
Jim Vena, Union Pacific’s CEO, will serve as the Chief Executive Officer of the combined company, while Norfolk Southern Directors, including Mark George and Richard Anderson, are expected to join the Union Pacific Board of Directors after completing the corporate governance process.
By CEO NA Editorial Staff
