Union Pacific, Norfolk Southern discuss merger to create
transcontinental railroad, AP source says
[July 18, 2025] By
JOSH FUNK
OMAHA, Neb. (AP) — Union Pacific and Norfolk Southern are in merger
talks to create the largest railroad in North America that would connect
the East and West Coasts.
The merger discussions began during the first quarter of this year,
according to a person familiar with the talks who isn't authorized to
discuss them publicly. It would combine the largest and smallest of the
country's six major freight railroads.
Both railroads declined to comment.
Within the industry there is widespread debate over whether such a
merger would be approved by the Surface Transportation Board even though
those regulators approved the deal that created CPKC railroad two years
ago with the Canadian Pacific's $31 billion acquisition of Kansas City
Southern railroad.
That merger combined the two smallest major railroads in North America
and left only six major freight railroads. But it was the first major
rail merger approved in more than two decades.
The bar for railroad mergers in the U.S. was raised substantially at the
start of the century after a disastrous combination of Union Pacific and
Southern Pacific in 1996 that snarled rail traffic for an extended
period, followed by the 1999 split of Conrail between Norfolk Southern
and CSX, which created backups in the East.
To be approved, any major rail merger must show it will enhance
competition and serve the public interest under the 2001 rules. The CPKC
merger was not judged under those rules because Kansas City Southern had
an exemption from them as the smallest major freight railroad at the
time.

Union Pacific CEO Jim Vena talked earlier this year about the potential
benefits of such a merger because it would streamline deliveries all
across the country by eliminating the delays that come along with one
railroad handing shipments over to another. Plus it would simplify
shipping for the companies that rely on railroads to deliver their raw
materials and finished products.
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A Norfolk Southern freight train passes through Homestead, Pa.,
March 12, 2025. (AP Photo/Gene J. Puskar, File)
 But in the past, some shippers have
raised concerns about the consequences of being left with even fewer
options to ship their goods because the major railroads are already
so powerful.
Some investors have long argued that the industry should eventually
consolidate down to two East-West railroads crossing the United
States alongside the two railroads that already cross Canada. But
regulators have been skeptical and taken a cautious approach. Any
proposed deal would face a lengthy STB review. That board is
currently evenly split between two Republicans and two Democrats
with one seat open.
Citi Research analyst Ariel Rosa said in a research note that a
major transcontinental railroad merger “would likely prove costly
and time consuming, risking a years-long distraction to management,
while facing significant pushback from regulators, politicians,
employee unions, competitors, customers, and other stakeholders.”
Union Pacific, which is based in Omaha, Nebraska, generated $24.3
billion revenue last year as its more than 30.000 employees
delivered freight all across the western United States. Norfolk
Southern reported $12.1 billion revenue and has roughly 20,000
employees and its headquarters is in Atlanta.
Norfolk Southern stock gained 3.7% during the day Thursday and rose
another 4.7% to hit $282.50 in after-market trading following the
Journal’s story.
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