Shareholders of Union Pacific (UNP) and Norfolk Southern (NSC) have voted in favor of the proposed $85 billion merger that will create America’s first coast-to-coast rail network.
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The votes were nearly unanimous, with 99% of both railroads’ shareholders voting to support the largest rail merger in history. The deal still needs the blessing of the U.S. Surface Transportation Board before it can be finalized.
In a news release, Union Pacific CEO Jim Vena said, “Our shareholders see the value and understand this merger will unlock new opportunities to enhance service, growth and innovation.” He added that he hopes to file the formal merger application by year’s end, which will initiate a lengthy review process.
Other Support
The blockbuster merger has also garnered support from the largest rail union and hundreds of shippers. However, some chemical manufacturers and competing railroads have raised concerns about whether the merger would hurt competition and lead to higher freight rates.
U.S. President Donald Trump said after a meeting with Vena that the proposed deal sounds good to him. For his part, Vena has forcibly argued that the merger is great for America because it will enable the combined railroad to deliver goods more quickly and help the companies that rely on its deliveries of both raw materials and finished products.
Is UNP Stock a Buy?
The stock of Union Pacific has a consensus Moderate Buy rating among 14 Wall Street analysts. That rating is based on nine Buy and five Hold recommendations issued in the last three months. The average UNP price target of $264 implies 18.97% upside from current levels.
