Union Pacific and Norfolk Southern Seek to Create US Transcontinental Railroad

Union Pacific and Norfolk Southern have announced a proposed merger to form the United States’ first coast-to-coast freight railway.

The transaction, subject to regulatory and shareholder approval, would connect more than 50,000 miles of rail across 43 states and link around 100 ports across North America.

Under the deal, Union Pacific will acquire Norfolk Southern in a stock and cash transaction. The merger values Norfolk Southern at an enterprise value of approximately 85 billion USD, or 320 USD per share. The combined company would have a total estimated enterprise value of more than 250 billion USD.

The agreement was unanimously approved by the boards of both companies. Subject to approval by the Surface Transportation Board (STB), shareholders, and other customary closing conditions, the merger is expected to complete by early 2027.

The companies say the merger will provide single-line freight service from coast to coast, reducing transit times, eliminating handoffs between railroads, and improving network efficiency. The combined railway would offer a more direct and faster alternative for US freight shippers and could compete more effectively with Canadian transcontinental railroads.

Jim Vena, Union Pacific Chief Executive Officer said:

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 Huron, 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.

Union Pacific and Norfolk Southern plan to invest in network improvements, expand intermodal services, and reduce congestion on roads by shifting more freight to rail. Both companies currently invest a combined 5.6 billion USD annually in infrastructure and innovation.

The companies also plan to expand the use of existing safety technologies, including predictive analytics for in-train forces and systems to detect mechanical or track defects.

They estimate the transaction could generate around 2.75 billion USD in annual cost savings and operational efficiencies.

Union Pacific and Norfolk Southern have stated that all union-represented employees who want to remain with the combined company will have jobs. The companies employ train crews, mechanical workers, and engineers represented by unions. Growth in rail freight volumes, they say, could lead to further hiring across the network.

Regulatory Process

On 30 July 2025, the Surface Transportation Board confirmed it had received a formal notice of intent from the two railways to file a merger application. This filing initiates the STB’s review process for major mergers under US rail regulations.

The railroads have indicated they will file their full application no later than 29 January 2026. The STB is then expected to evaluate the proposal’s impact on competition, safety, service, and the public interest.