Union Pacific will buy smaller rival Norfolk Southern in a deal worth $85 billion. U.P. says this would create the first coast-to-coast freight rail operator in the U.S. Reuters said, if approved, the deal would be the largest buyout in the sector’s history. It would combine Union Pacific’s tracks in the western two-thirds of the U.S. with Norfolk’s 19,500-mile network covering 22 eastern states. The two railroads would have a combined enterprise value of $250 billion and would unlock about $2.75 billion in annualized synergies.
The deal will likely face lengthy regulatory scrutiny amid union concerns over potential rate increases, service disruptions, and job losses. The National Grain and Feed Association says it will undertake an extensive evaluation of the proposed merger to “better understand” the implications for the industry. Mike Steenhoek of the Soy Transportation Coalition says the deal will create winners and losers in the shipping industry.