Union Pacific is purchasing east-coast Class 1 Norfolk Southern for $85 billion.
The purchase will create a U.S. transcontinental railroad. Union Pacific will retain the name, and the combined company will have a value of more than $250 billion. The deal is pending federal approval.
“Railroads have been an integral part of building America since the Industrial Revolution, and this transaction is the next step in advancing the industry,” Jim Vena, Union Pacific CEO, said. “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. Right now, tens of thousands of railroaders are moving almost everything we use. You name it, and at some point, the railroad hauled it.”
Vena will remain Union Pacific CEO.
Union Pacific and Norfolk Southern exchange approximately 1 million carloads annually, and the purchase has intermodal shippers concerned about higher rates as a consequence of less competition. Proponents say the acquisition will provide potential faster and more reliable service.
J.B. Hunt, the largest domestic truckload intermodal operator in the United States, uses Norfolk Southern in the east and BNSF Railway in the west.