Lillian VestThe Union Pacific and the Norfolk Southern boards of directors unanimously approved Tuesday to merge the two freight giants in an $85 billion deal, according to the Union Pacific officials.
The potential merger, named the “transaction,” would create a Union Pacific Transcontinental Railroad, developing a single rail network throughout the country and connecting the East Coast with the West Coast. According to the Tuesday release, the railroad seeks to connect over 50,000 route miles across 43 states and could link an estimated 100 ports.
The two railroads combined are estimated to be worth $250 billion, and by working as a single company, they could save $2.75 billion each year within three years, according to the Union Pacific officials.
The railroads expect the single network will provide quicker service by eliminating car touches and interchange delays, opening new routes, expanding intermodal services and ensuring faster transit times on rail corridors.
The transaction is subject to approval by shareholders. Pending this final approval, the railroads will need to submit a merger application to the Surface Transportation Board. The railroads seek to close the transaction by early 2027, according to the release.
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