By Ryan Hanrahan
Reuters’ Sabrina Valle, Shivansh Tiwary and David French reported that “Union Pacific said on Tuesday it would buy smaller rival Norfolk Southern in an $85 billion deal to create the first U.S. coast-to-coast freight rail operator and reshape the movement of goods from grains to autos across the country.”
“If approved, the deal would be the largest ever buyout in the sector and combine Union Pacific’s stronghold in the western two-thirds of the United States with Norfolk’s 19,500-mile network that primarily spans 22 eastern states,” Valle, Tiwary and French reported. “The two railroads are expected to have a combined enterprise value of $250 billion and would unlock about $2.75 billion in annualized synergies, the companies said.”
“The deal will face lengthy regulatory scrutiny amid union concerns over potential rate increases, service disruptions and job losses. The 1996 merger of Union Pacific and Southern Pacific had temporarily led to severe congestion and delays across the Southwest,” Valle, Tiwary and French reported. “The deal reflects a shift in antitrust enforcement under U.S. President Donald Trump’s administration. Executive orders aimed at removing barriers to consolidation have opened the door to mergers that were previously considered unlikely.”
Source : illinois.edu