Railroad Mega-Merger, Boeing CEO Exclusive, CEO Changes at Novo Nordisk and P&G 7/29/25

SPEAKER_1 (0:00)

Fidelity Trading Dashboard brings live data, news and charts into one screen, so you can build and place trades better. Start for free at fidelity.com/tradingdashboard. Investing involves risk, including risk of loss. Fidelity Broker Services LLC, member NYSE SIPC.

SPEAKER_2 (0:16)

Introducing the new Dell AIPC, powered by the Intel Core Ultra Processor. It helps do your busy work for you, so you can fast forward through editing images, designing presentations, generating code, debugging code, summarizing meeting notes, finding files, managing your schedule, responding to Jim's long emails, leaving all the time in the world for the things you actually want to do. No offense, Jim. Get a new Dell AIPC starting at 69999 at dell.com/ai-pc. How those ahead, stay ahead.

David Faber (0:47)

Market insight and analysis. You're listening to the opening bell of CNBC Squawk on the Street.

Carl Quintanilla (0:53)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. The future is pretty steady despite a patch of earnings disappointments today out of Spotify, UPS, UNH, Whirlpool, Novo. Fed meeting begins today. M&A gets more active with the rails. S&P is going for seven consecutive record closes today. Our roadmap begins with a mega US railroad deal. UNP buying rival Norfolk Southern, creating the nation's first coast to coast freight rail operator and potentially reshaping the transportation landscape. We have a first on CNBC with the CEOs of both companies in the 10 a.m. hour.

David Faber (1:29)

Plus, as Carl referenced, a flood of earnings this morning, including Boeing, which is higher after its slashed losses. Boeing CEO Kelly Ortberg is going to join us. That's just a few moments from now. We're going to talk to him, of course, about his outlook for the plane maker. That's going to be great. Good. I'm glad to hear you think it's going to be great. All right. UnitedHealth also, I don't know if that's great. 2025 earnings are going to be worse than expected. In fact, stock is down, but it's off its early warning lows.

Carl Quintanilla (1:58)

Let's begin with this Union Pacific, Norfolk Southern mega deal. David, I know you've been working on some of the deal valuations.

David Faber (2:05)

I mean, listen, it was not quite two and a half weeks ago, we talked about all of the chatter. I talked about the possibility of a transcontinental merger. Jim was like, whoa. Here we are.

They were working hard in Washington at the time. That's a lot of the chatter that I was starting to hear, Jim Venna being aggressive in terms of trying to get a sense for the willingness of regulators, namely the Surface Transportation Board, to approve a potential transcontinental deal. And said simply, I think their contention is going to be, a transcontinental railroad is good for the United States of America. And that may well be a winning argument. And you now have the deal to back that up. And as for the deal itself, around 320 bucks a share is where it comes in. Let's see how UNP stock does. You're going to have some people shorting the stock at this point. What's it composed of? One share of Union Pacific is what you get, and $88.82 in cash for each share of Norfolk Southern, of course. It's worth about $72 billion in cash and stock. You're talking, what is it, about 72 or so percent, somewhere in there, of the composition being in stock. And $2.5 billion termination fee. No voting trust. Remember, this is something that I've been talking about in the last couple of weeks is this deal became more and more of a potential reality. Of course, last week, we had the companies confirming they were in talks. No voting trust, which means you're going to have to sit there as a shareholder and wait. How long? 18 months, two years. We'll see. But Jim, the key is going to be the STB. They're the ruling body here. It's not a DOJ, as we are so typically accustomed to, in terms of ruling on antitrust. Here, it's the STB. They have four members right now. It's two Democrats, two Republicans. But one of the Democrats is falling off in late December. The president appoints the members. And as so many other decisions in this world we live in now come back to President Trump, so too made this in the sense of he has the power to appoint another Republican. And that's going to be the key. The companies obviously will be arguing for all the reasons that I cited two and a half weeks ago when I was talking about this possibility. The American champion, reindustrialization, efficiencies that will come and the namely that, hey Canada's got a transcontinental railroad, why don't we?