Mergers &
Acquisitions

This week brings transformative deals in transportation and energy infrastructure as Union Pacific aims to create a coast-to-coast rail giant while MPLX expands its Permian Basin footprint.

1. Union Pacific Plans $85 Billion Acquisition of Norfolk Southern

Union Pacific (NYSE: UNP) has announced its intent to acquire Norfolk Southern (NYSE: NSC) in a landmark $85 billion deal that would create the first coast-to-coast freight rail operator in the U.S. The combination of Union Pacific's western network with Norfolk Southern's 20,000-mile eastern system would form a rail giant with an enterprise value of approximately $250 billion.

The proposed merger is expected to generate $2.75 billion in synergies through operational improvements, network optimization, and expanded capacity. However, the deal faces significant regulatory hurdles and opposition from labor unions concerned about job losses and potential service disruptions. The largest rail union has raised monopoly concerns about the combined entity's market power.

If approved, this would be the largest buyout in U.S. railroad history, fundamentally reshaping freight transportation by connecting both coasts under single ownership. The deal is expected to undergo intense regulatory scrutiny with a potential close date in 2026.

Acquirer: Union Pacific (Omaha, Nebraska)
Target: Norfolk Southern (Atlanta, Georgia)
Deal Value: ~$85,000,000,000
Enterprise Value: ~$250,000,000,000
Announcement Date: July 30^th, 2025
Expected Close: 2026
Union Pacific Advisors: Morgan Stanley and Wells Fargo (Financial); Skadden, Arps, Slate, Meagher & Flom LLP (Legal)
Norfolk Southern Advisors: Bank of America (Financial); Wachtell, Lipton, Rosen & Katz (Legal)

Summary

• Would create first coast-to-coast freight rail operator
• $2.75 billion in expected synergies
• Faces regulatory and labor union challenges

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2. MPLX Acquires Northwind Midstream for $2.38 Billion

MPLX (NYSE: MPLX) has agreed to acquire Northwind Midstream for $2.38 billion in cash, significantly expanding its sour gas gathering and processing capabilities in the Permian's Delaware Basin. The deal comes as producer activity continues to increase in the region, with Northwind operating over 200 miles of pipelines across 200,000 acres in New Mexico.

Northwind, backed by Five Point Infrastructure, currently treats 150 million cubic feet of sour gas daily and operates two acid gas injection (AGI) wells. These wells safely dispose of carbon dioxide and hydrogen sulfide byproducts by injecting them underground, addressing environmental concerns while enabling production scaling.

The all-cash deal, expected to close in Q3 2025, will be immediately accretive to MPLX's cash flow. The acquisition positions MPLX to alleviate current AGI bottlenecks and meet growing demand as Northwind expands its treating capacity. The transaction will be funded through debt financing.

Acquirer: MPLX (Findlay, Ohio)
Target: Northwind Midstream (Houston, Texas)
Deal Value: ~$2,375,000,000 (All-cash)
Announcement Date: July 31^st, 2025
Expected Close: Q3 2025
MPLX Advisors: Not Disclosed
Northwind Advisors: Not Disclosed

Summary

• Expands MPLX's Permian Basin sour gas capabilities
• Includes 200 miles of pipelines and AGI infrastructure
• Addresses critical bottleneck in sour gas processing