Shareholders of Union Pacific and Norfolk Southern signed off Friday on an $85 billion plan to merge the two freight giants, clearing the first major hurdle toward creating the nation’s first coast-to-coast rail network.
According to The Associated Press, roughly 99% of investors from both companies approved the deal. Union Pacific CEO Jim Vena called the vote a clear sign that shareholders “see the value and understand this merger will unlock new opportunities to enhance service, growth and innovation.”
The merger still requires approval from the U.S. Surface Transportation Board (STB), which will launch a lengthy review once the companies file their application — expected in late November or early December.
Supporters of the deal include the country’s largest rail union and hundreds of shippers who say a unified system would significantly reduce delays that occur when freight is transferred between railroads.
But opposition is lining up, too. Chemical manufacturers and competing railroad BNSF warn that the merger could squeeze competition and drive up shipping costs.
President Donald Trump, after an Oval Office meeting with Vena, said the proposal “sounds good” to him.
The merger would combine Union Pacific’s sprawling Western network with Norfolk Southern’s extensive rail system in the East. The unified line would stretch over 50,000 miles of track in 43 states and connect major ports on both coasts.
Rail executives argue the deal would speed up deliveries of raw materials and finished goods across the country. The companies also say it would eliminate bottlenecks at interchange points where trains currently must be handed off from one railroad to another.
Vena and Norfolk Southern CEO Mark George say they’re optimistic about approval under Trump’s pro-business administration.
Their confidence grew after Trump fired the STB’s only member who opposed a 2022 Canadian Pacific–Kansas City Southern merger — a removal now being challenged in court by that former board member, Robert Primus.
Analysts say approval could trigger further consolidation. CSX may need to seek a merger partner of its own to stay competitive. Other major railroads — BNSF, CPKC and Canadian National — insist cooperation agreements rather than mergers are the smarter path, but CSX’s recent choice of a CEO with a mergers background is raising eyebrows.
Union Pacific is offering $20 billion in cash and one UP share for each Norfolk Southern share. NS shareholders would receive one Union Pacific share plus $88.82 in cash per share — valuing Norfolk Southern at roughly $320 each.
That price sits far above the railroad’s recent trading value of about $260 per share, before reports of the possible merger surfaced earlier this month. The agreement also includes a $2.5 billion breakup fee if the deal falls apart.
