Norfolk Southern (NSC) M&A Announcement summary

Deal rationale and strategic fit

• Creates the first true transcontinental railroad in the U.S., connecting coast to coast, enhancing national competitiveness, and supporting domestic manufacturing and economic growth.

• Strengthens the U.S. supply chain with safer, faster, and more reliable single-line service, reducing complexity and improving reliability for customers.

• Enables modal conversion by shifting over 2 million annual truckloads to rail, reducing highway congestion, improving safety, and cutting emissions.

• Unlocks new growth opportunities in underserved and watershed markets, expanding service offerings and providing new direct intermodal and manifest train routes.

• Provides a unified digital experience, streamlined customer service, and single-line pricing with one contract and accountable partner.

Financial terms and conditions

• Expects up to $2 billion in net revenue and EBITDA synergies by year three, with nearly $1 billion in cost synergies identified.

• $2.1 billion in incremental capital investment planned over three years, including $1 billion for capacity improvements and $1.1 billion for technology and integration.

• Combined 2025 capital investment of $5.6 billion, with $2.1 billion planned for integration.

• Annual capital synergies of $133 million projected through more efficient network and fleet use.

• Share repurchases to resume in Year 2, growing to $10 billion+ annually by Year 3, with a long-term leverage target of 2.8x.

Synergies and expected cost savings

• Streamlined network expected to reduce 2,400 daily railcar and container handlings and save 60,000 car miles per day.

• Integration to deliver almost 900,000 fewer handlings and 1.7 million fewer train miles annually.

• Enhanced asset utilization, faster car turns, and improved efficiency to cut equipment costs for customers.

• Up to $2 billion in net revenue and EBITDA synergies, driven by intermodal and bulk growth.

• ~$1 billion in cost synergies from efficiency improvements, technology, and SG&A rationalization.