6 days ago
Union Pacific, Norfolk Southern in Talks for $200B Rail Megamerger
Union Pacific (UNP, Financials) and Norfolk Southern (NSC, Financials) are in the last stages of talks to merge. If the merger goes through, it would make the first coast-to-coast freight railroad in the U.S. and potentially change the industry.
The new business would connect Union Pacific's western routes to Norfolk Southern's eastern network. It would also make it easier for cargo to travel around the country by eliminating out transfers at big hubs like Chicago.
According to sources, regulators are getting ready for not only this deal, but possibly a second one as BNSF and CSX look into their own merger options. The U.S. Surface Transportation Board is getting ready for what might be the biggest merger of railroads since the Canadian PacificKansas City Southern agreement in 2023.
There is still no agreement, and both firms have problems to deal with, including as antitrust reviews, labor opposition, and worries about rates. Sources indicate that the Trump administration's more lenient position on mergers has made a transaction more possible.
Shares of Union Pacific fell 4% on Thursday, while shares of Norfolk Southern fell a little.
This article first appeared on GuruFocus.
