Canadian Pacific Railway Ltd. on Wednesday released the full details of the merger-proposal letter it sent to Norfolk Southern Corp., confirming a cash-stock offer that it said would value the combined company at $270.68 per share.

The terms of the offer, at $46.72 in cash and 0.348 shares of the merged company for each Norfolk Southern share, are in line with figures released by Norfolk Southern late Tuesday.

Based on CP's closing price Tuesday, the offer would be worth $94.95 a share, or more than $28 billion.

According to the text of the letter, CP said the merged company would be listed on both the New York and Toronto Stock Exchanges, with Norfolk Southern shareholders owning 41% of the new company.

CP said it based the $270.68 per share value of the new entity in part on the "substantial synergies" created by a merger and a completion date of Dec. 31, 2017.

CP shares closed Tuesday in New York at $138.58 and Norfolk Southern closed at $86.97.

The Canadian railroad outlined a number of possible benefits of merging in its letter, including the potential for more than $1.8 billion in annual operating synergies over the next several years and tax-savings opportunities.

"We are ready to begin working with you and your team immediately on this transformational opportunity and are prepared to commit whatever resources may be necessary to complete the proposed transaction expeditiously and in a manner which both recognizes and fairly addresses any social considerations related to the successful integration of our two great companies," CP said in the letter.

CP said Tuesday it had sent a letter to Norfolk Southern outlining a proposal, but didn't provide specific numbers. In a statement later Tuesday, Norfolk Southern said it had received an "unsolicited, low-premium, nonbinding and highly conditional indication of interest" from Canadian Pacific to acquire the company.

A merger between the two railroads would create an industry giant with a combined market value of about $47 billion, and a rail network that would stretch from the Canadian West Coast to the Gulf of Mexico and U.S. Atlantic seaboard.

Write to Judy McKinnon at judy.mckinnon@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

November 18, 2015 08:35 ET (13:35 GMT)

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