July 29 (UPI) — The Union Pacific and Norfolk Southern corporations announced Tuesday the companies will merge to create America’s first transcontinental freight railroad.
The agreement will see Union Pacific purchase Northern Southern for stock and cash, at an implied $85 billion for Norfolk Southern, which creates a combined organization worth more than $250 billion.
Not to be confused with transcontinental rail service, which has been available since 1869 when the famous “Golden Spike” linked Union Pacific with the Central Pacific railroads in Promontory Summit, Utah, when it comes to freight such service requires a transfer of goods from one railroad company to another.
However, the deal made between Union Pacific and Norfolk Southern will create a seamless connection that rolls over 43 states and more than 50,000 route miles from coast to coast. The service will link around 100 ports and is intended to upgrade the American supply chain, while also increasing employment opportunities and securing union jobs.
“Railroads have been an integral part of building America since the Industrial Revolution, and this transaction is the next step in advancing the industry,” said Union Pacific Chief Executive Officer Jim Vena in a press release. “Imagine seamlessly hauling steel from Pittsburgh, Pa., to Colton, Calif., 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.”
“It builds on President Abraham Lincoln’s vision of a transcontinental railroad from nearly 165 years ago and advances our Safety, Service and Operational Excellence Strategy,” said Vena. “I am confident this historic transaction will enhance competition to benefit customers, communities, and employees while delivering shareholder value.”
The combined service will result in quicker and more capable freight service that would cut down on interchange delays while expanding on modes of freight transport and opening new routes that can better compete with truck transportation of goods, the companies said.
“Norfolk Southern, like Union Pacific, is a railroad integral to the U.S. economy, with a storied 200-year legacy of serving customers across 22 states in the eastern half of the nation,” said CEO of Norfolk Southern Mark George in the release. “Our safety, network, and financial performance is among the best we’ve had as a company, as is our customer satisfaction.”
