Union Pacific, Norfolk Southern announce merger plan

NEW YORK, July 29 (Xinhua) -- Two of the largest U.S. freight railroad operators, Union Pacific and Norfolk Southern, on Tuesday announced a plan to merge in a landmark deal that would create the first transcontinental freight railroad in U.S. history.

Under the terms of the proposed merger, Union Pacific will acquire Norfolk Southern in a stock and cash transaction with the latter valued at 85 billion U.S. dollars, according to releases from the two sides.

The proposed combination would unite Union Pacific's expansive western rail network with Norfolk Southern's lines across the eastern United States, forming a single system with more than 50,000 miles of track across 43 states and direct access to major ports on both the Atlantic and Pacific coasts.

The merger would mark a historic milestone in U.S. transportation. While the United States was first linked by rail in 1869, no single company has ever operated a unified coast-to-coast rail line. This merger aims to change that, creating a streamlined freight corridor across the continental United States and reshaping the competitive landscape of the industry.

If approved, the transaction would reshape how goods are moved across the country, offering end-to-end service under one operator and potentially reducing shipping times for cross-country freight.

However, the deal still faces regulatory scrutiny, particularly from the Surface Transportation Board, which has taken a cautious stance on rail mergers in recent years due to concerns over competition and service quality.

"The experience in the rail industry has been that mergers have resulted in no improvement in, or worse, service, and higher rates," said Ann Warner, a logistics consultant to rail customers and trade associations of rail shippers.