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Report: Union Pacific, Norfolk Southern could reach merger deal by next week

An agreement would create the first $200 billion railroad

Stuart Chirls
·
Gemini Sparkle

Key Takeaways:

  • Union Pacific and Norfolk Southern are in advanced merger talks, potentially creating the first transcontinental railroad.
  • A tentative agreement could be announced as early as next week, resulting in a company with a $200 billion market capitalization.
  • The Surface Transportation Board will review the merger, a process that could take up to 22 months.
  • Competitors are expected to lobby the STB for concessions to address potential competitive imbalances.
Key takeaways sponsored by SONAR
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Union Pacific, the largest U.S. railroad, and Norfolk Southern could announce a tentative merger agreement as early as next week, according to a published report. 

Bloomberg cited sources familiar with the talks in its report Friday.

Omaha-based UP (NYSE: UNP), the largest Class I railroad and NS (NYSE: NSC), headquartered in Atlanta, recently confirmed that they have been in advanced discussions regarding a merger that if successful would create the first transcontinental railroad. A proposed consolidation would produce a rail colossus with $200 billion in market capitalization. 

Union Pacific had no comment. Norfolk Southern did not immediately respond to a message from FreightWaves seeking comment.

It’s also likely that competitors such as BNSF, CSX (NASDAQ: CSX), CN (NYSE: CNI), and CPKC (NYSE: CP) would importune the Surface Transportation Board, which will ultimately accept or reject the deal, for concessions to balance any emerging competitive issues. Industry observers have said that CN, in particular, could seek access to Mexico, after CPKC’s 2023 tie-up with Kansas City Southern made it the first run-through tri-border carrier.

In a published timeline guide, the STB estimates the review process could take as long as 22 months once formal filings are submitted.

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Find more articles by Stuart Chirls here.

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Union Pacific and Norfolk Southern confirm advanced merger talks

Stuart Chirls

Stuart Chirls is a journalist who has covered the full breadth of railroads, intermodal, container shipping, ports, supply chain and logistics for Railway Age, the Journal of Commerce and IANA. He has also staffed at S&P, McGraw-Hill, United Business Media, Advance Media, Tribune Co., The New York Times Co., and worked in supply chain with BASF, the world's largest chemical producer. Reach him at stuartchirls@firecrown.com.