Union Pacific has reached an agreement to acquire Norfolk Southern in a landmark deal to create a $250 billion rail mega-conglomerate, forming the first coast-to-coast rail network in U.S. history. The transaction—primarily stock-based with a partial cash component—represents the largest corporate merger of the year and marks a transformative moment for the American freight rail industry.

The combined company will span more than 50,000 miles of track across 43 states, linking approximately 100 ports from the Pacific to the Atlantic. With Union Pacific’s operations focused west of the Mississippi River and Norfolk Southern’s stronghold in the east, the merger enables a seamless transcontinental freight corridor—eliminating the need for interchange at Chicago and unlocking new efficiencies in logistics and supply chain performance.

“This is the next step in advancing the American freight rail industry,” said Union Pacific CEO Jim Vena. “We are creating a single, coast-to-coast network that will deliver faster, more competitive service, reduce highway congestion, and support a new era of American innovation.”

Under the terms of the agreement, Norfolk Southern shareholders will receive one Union Pacific share and $88.82 in cash for each Norfolk Southern share, valuing the company at $320 per share and giving it an enterprise value of $85 billion. Combined with Union Pacific’s $165 billion valuation, the merger will create a $250 billion industry powerhouse.

The deal will face close scrutiny from regulators, particularly the Surface Transportation Board (STB), which was granted broader oversight powers after the last wave of railroad consolidation in the early 2000s. The Justice Department, Amtrak, labor unions, and other stakeholders will have the opportunity to weigh in during the approval process. The last major U.S. rail merger—Canadian Pacific’s $31 billion acquisition of Kansas City Southern—took nearly two years to receive clearance.

Despite the challenges, Vena emphasized the transaction’s potential to transform America’s supply chain. “This combination supports our Safety, Service, and Operational Excellence strategy, and positions us to lead the freight transportation industry well into the future,” he said.

The company estimates the merger will generate $2.7 billion in annual synergies by reducing delays, cutting down car touches and interchanges, and expanding intermodal services. It is also expected to contribute to lower costs for freight customers by improving efficiency.

The Union Pacific–Norfolk Southern merger brings to life a 165-year-old vision first championed by President Abraham Lincoln: a unified transcontinental railroad. “Our great companies have deep roots in spurring the industrial revolution of the past,” Vena noted. “There is no better combination of railroads to realize Lincoln’s dream.”

In a direct message to Norfolk Southern’s 20,000 employees, Vena pledged respect and transparency. “I know our work impacts not just us but our families,” he said. “You can count on me to be honest, thoughtful, and demanding of both myself and our leadership. I respect the legacy and contributions of every railroader who brought us to this point.”

Vena also expressed confidence that the combination would support job growth and preserve union positions. “We expect this merger will lead to employment opportunities as we expand service and capacity across the country.”

A formal merger application will be submitted to the Surface Transportation Board in the coming months. Until regulatory approval is secured, Union Pacific and Norfolk Southern will continue to operate independently. Employees have been instructed to follow strict antitrust guidelines and avoid any activities or discussions that may conflict with legal requirements.

If approved, this would be the largest U.S. corporate transaction since Microsoft’s $75.4 billion acquisition of Activision Blizzard in 2023.

Mark George, CEO of Norfolk Southern, called the deal a step forward for the U.S. economy. “This merger will ignite rail’s ability to deliver for the entire country—not just today, but for generations to come."