Union Pacific Forges Rail Behemoth in $72 Billion Norfolk Deal

Union Pacific Corp. agreed to acquire Norfolk Southern Corp. in a $72 billion cash-and-stock transaction, forming the only US transcontinental railroad in what stands to be the industry’s largest deal ever.

The tie-up will marry Union Pacific’s network across the western US with Norfolk’s East Coast routes, reshaping a domestic rail market that’s now comprised of just a half-dozen companies. Observers predict other major deals could follow, as competitive pressure rises on rivals including CSX Corp. and Berkshire Hathaway Inc.’s BNSF.

“We think the political environment is accommodating,” Union Pacific Chief Executive Officer Jim Vena said Tuesday in an ...