This week Debs and Graham run the numbers on the proposed Union Pacific and Norfolk Southern merger, a deal that would create a $250bn rail network. Debs built a short form merger model for it, and how she built it is the real story.
Fable burns through tokens fast, so Debs asked Claude to delegate the build: Sonnet for the data mining and consensus estimates, Fable for planning and structure, Opus to stress test the logic at the end, with Claude supplying the prompts for each handover. Switching models manually in the Excel add-in is clunky, but it worked and she never hit her token limit.
Timestamps:
00:00 — Cold open 00:43 — Intro: the Union Pacific and Norfolk Southern deal 01:48 — Why US rail is the way it is 04:03 — Delegating the build to Claude's agents 05:13 — A word from Wall Street Prep 05:45 — Which tasks go to Sonnet, which to Opus 06:58 — Why the Excel add-in makes this clunky 11:21 — Inside the merger model 12:51 — $2.75bn of synergies: material or punchy? 14:45 — Asset step ups and the tax treatment 16:22 — EPS accretion and pro forma leverage 19:33 — Reprompting live for standalone leverage 20:19 — Why the sensitivity tables are so hard to audit 22:23 — So is the deal any good?
Topics covered:
→ Using Fable as an orchestrator and delegating to Sonnet and Opus → Which tasks are worth delegating, and what the handovers cost in tokens → Building a short form merger model in the Excel add-in → Consideration mix, synergies and whether $2.75bn is punchy → EPS accretion, pro forma leverage and why the two go together → Asset step ups, and why they don't help in a stock deal → Where the model falls short: standalone leverage, data tables → Whether the deal itself is actually interesting
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