Union Pacific to acquire Norfolk Southern in $85B deal
Union Pacific and Norfolk Southern announce plans to merge, forming the first transcontinental freight railroad in the United States – a move expected to have sweeping implications for the national logistics network . . . and measurable consequences for Indiana’s rail economy.
The proposed acquisition, valued at approximately $85 billion, would unify more than 50,000 miles of rail across 43 states, including extensive lines that cross Indiana’s manufacturing and agricultural corridors. The merged network would link almost 100 ports and significantly streamline east-west rail shipments.
That means Hoosier goods, from auto parts to pharmaceuticals, could move more quickly and directly to West Coast ports, while raw materials from the Gulf and Pacific regions could reach Indiana factories and warehouses with fewer handoffs.
Once completed, the unified railway will carry an enterprise value estimated at more than $250 billion.
For a state that depends heavily on its central location and logistics capacity (like, say, Indiana), the merger could alter supply chains, impact rail pricing, and change how freight flows through cities such As Fort Wayne, Gary, and Indianapolis.
The boards of both companies have unanimously approved the transaction. The deal now awaits review by the federal Surface Transportation Board, shareholder backing, and other closing approvals. Finalization is targeted for early 2027.
Both Hoosier freight and ports stand to gain faster, more direct access to coastal ports and major supply hubs. Supporters believe the deal could bring new infrastructure investment, job growth, and freight efficiency to the state, while critics warn it may reduce competition or complicate logistics for certain industries.
Shifting lenses from macro to micro, we’ll offer you a deep dive into what Union and Norfolk’s merger means for Hoosier transportation, logistics, and beyond.
Building on a Legacy of Competition and Expansion
The merger unites two historic rivals.
Union Pacific, founded in 1862, assisted in constructing the first transcontinental railroad, connecting the western frontier to the national economy. Norfolk Southern, meanwhile, has long served the East Coast and Midwest, built on the heritage of the Norfolk & Western and Southern Railway systems. Readers of this newsletter are well aware of how often Norfolk pops up in our “IN Rail” coverage.
You should not consider it an exaggeration to say the proposed deal represents the most significant U.S. freight rail consolidation in decades. Norfolk and Union argue the merger enhances service by reducing freight handoffs, cutting transit times, and creating a seamless, single-line network that improves reliability.
The combined rail entity gains a competitive edge against Canadian giants like Canadian National and Canadian Pacific Kansas City, both of which already operate coast-to-coast systems following previous cross-border mergers.
The competitive advantage for Union Pacific and Norfolk Southern may be even stronger due to recent U.S. tariffs on Canadian goods. If those tariffs persist or expand, shippers may increasingly favor domestic rail routes to avoid cross-border complications, potentially boosting the appeal and utility of a fully U.S.-based coast-to-coast network.
Together, the two rail authorities invest more than $5.6 billion annually in infrastructure . . . and that’s before mentioning their plans to expand intermodal hubs and implement advanced safety systems.
New Rail Realities for Indiana
Indiana, a longstanding hub for freight traffic (and gateway to a major rail center in Chicagoland), stands to see both benefits and challenges from the merger.
With Norfolk Southern already operating major facilities in Fort Wayne, Muncie, and Elkhart, and Union Pacific primarily serving western corridors, the merged railway could open new direct routes for shippers and manufacturers across the state.
Supporters argue that the streamlined system could boost the movement of agricultural products, plastics, steel, and automotive components in Indiana specifically. Improved reliability and new intermodal offerings may also strengthen Indiana’s logistics competitiveness compared to other Midwest states.
The Indiana Manufacturers Association and the Ports of Indiana both express cautious optimism, citing the potential for enhanced market access and reduced logistics costs for Hoosier businesses. Leaders from the Indiana Chamber of Commerce also note that more efficient freight service could bolster the state’s manufacturing and agricultural exports, especially if intermodal hubs such as those in Indianapolis or Fort Wayne are further developed under the merged network.
Union Pacific and Norfolk Southern have stated that all union-represented employees who wish to stay with the company will retain their jobs. The companies project growth in rail volumes that may lead to more job opportunities for Hoosier workers.
However, the proposal is also already drawing scrutiny from local leaders, regulators, and industry groups. Mergers of this scale often raise concerns about reduced competition, workforce impacts, and control over infrastructure.
Sen. Jean Leising (R) of Oldenburg, who has long advocated for stronger rail service oversight in rural areas, warns that consolidation could sideline smaller communities if service is rerouted to more profitable corridors. The Indiana Rail Transportation Group joins Sen. Leising in questioning whether the merger would reduce competition in freight pricing, particularly for agricultural producers and small manufacturers dependent on single-line access.
Additionally, Hoosier Environmental Council representatives are asking federal regulators to study the environmental impact of increased rail traffic through urban areas like Indianapolis and Hammond.
Next Steps in Regulatory Review
With the Surface Transportation Board now in possession of formal notice of intent, the regulatory clock has begun ticking. Union Pacific and Norfolk Southern are expected to file their full merger application by January 29, 2026.
That document will trigger a comprehensive review process by the Surface Transportation Board, which is tasked with evaluating whether the merger serves the public’s interest.
During this review, STB will open a public comment period, likely in early 2026, allowing state officials, local governments, industry stakeholders, labor unions, and individual citizens to weigh in.
You can bet that Hoosier officials involved in manufacturing and logistics will have plenty of formal feedback to submit on how the merger could affect their businesses and communities . . . and your favorite transportation newsletter will be covering that commentary.
STB may also choose to hold public hearings in Indiana to gather testimony. Final approval is not expected before late 2026. If granted, the merger could be completed as early as the first quarter of 2027. However, any significant objections raised by regulators, competitors, or community groups could extend the timeline or potentially derail (pun intended) the deal altogether.
If approved, the merger would usher in a new era for American freight rail with Indiana positioned as a key player. Stay tuned.