08:36 AM EDT, 07/29/2025 (MT Newswires) -- Union Pacific ( UNP ) said Tuesday it will acquire Norfolk Southern ( NSC ) in a stock and cash transaction, implying a value for Norfolk Southern ( NSC ) of $320 per share.

The $320 per share represents a 25% premium to Norfolk Southern's ( NSC ) 30-trading day volume weighted average price on July 16, the company said.

The value per share implies an enterprise value of $85 billion for Norfolk Southern ( NSC ), Union Pacific ( UNP ) said.

Under the terms of the agreement, Norfolk Southern ( NSC ) shareholders will receive 1 Union Pacific ( UNP ) common share and $88.82 in cash for each Norfolk Southern ( NSC ) share, the company said.

Union Pacific ( UNP ) said it will issue approximately 225 million shares to Norfolk Southern ( NSC ) shareholders, representing 27% ownership in the combined company on a fully diluted basis.

The agreement is structured without a voting trust and includes a $2.5 billion reverse termination fee, the company said.

Union Pacific ( UNP ) said the cash portion of the transaction will be funded through a combination of new debt and balance sheet cash.

Based on 2024 results, the pro-forma combined company would have revenue of approximately $36 billion, EBITDA of approximately $18 billion, operating ratio of 62%, and free cash flow of $7 billion, according to Union Pacific ( UNP ).

The transaction is expected to be accretive to Union Pacific's ( UNP ) adjusted EPS per share in the second full year after closing, the company said, adding they plan to close the transaction by early 2027.

Union Pacific ( UNP ) and Norfolk Southern ( NSC ) shares were down 1% and 2.8%, respectively, in recent premarket activity.