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 and enhancing national competitiveness, supply chain efficiency, and economic growth.

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

• Provides unified, single-line service with improved customer visibility, streamlined contracts, and expanded service offerings, especially in underserved markets.

• Delivers benefits beyond alliances, including seamless service, expanded market reach, and new direct intermodal and manifest train routes.

• Advances domestic manufacturing and positions U.S. rail to win in global markets.

Financial terms and conditions

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

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

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

• Combined 2025 capital investment of $5.6 billion, with annual free cash flow projected to exceed $12 billion by year three.

• Share repurchases expected to resume in year two, growing to over $10 billion annually by year three.

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.

• Intermodal growth of 1.4 million annual loads and manifest/bulk growth of 425,000 annual carloads projected.

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

• Anticipates 900 net new union jobs by the third year post-merger due to volume growth.