Union Pacific and Norfolk Southern, two major US railroad companies announced a historic agreement to merge their companies.
This deal, which still needs to be reviewed and approved by government regulators, would create America’s first transcontinental freight railroad that stretches across the entire company.
As per FoxBusiness, Union Pacific will buy Norfolk Southern by paying $320 for each of its shares, using a mix of cash and stock.
The $320 offer is 25% higher than the average price Norfolk Southern's stock had over the previous 30 days, making it better-than-usual deal for Norfolk Southern's shareholders.
If the deal is approved, it will be one of the biggest railroad merger ever in the US and first time one company controls train shipping across the entire company, from East Coast to the West Coast.
Union Pacific CEO Jim Vena in a statement, noting, “Railroads have been an integral part of building America since the Industrial Revolution, and this transaction is the next step in advancing the industry," as per CNN.
Meanwhile, Mark George, CEO of Norfolk Southern said, “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."
The two companies plan to officially submit their merger request to the Surface Transportation Board within the next six months and hope to get all necessary approvals and complete the merger by early 2027.
