In a move that could signal the final round of railroad mega-mergers, Union Pacific is in discussions to acquire Norfolk Southern, its smaller eastern rival, according to a published report.
The talks are in the early stages, the Wall Street Journal reported late Thursday after the close of markets, quoting anonymous sources.
Shares of Atlanta-based NS (NYSE: NSC) were up 3.65% during the day, but were up 2.55% post-market. Union Pacific (NYSE: UNP) was off 1.6% on the day, and another 0.71% following the merger news. NS rival CSX (NASDAQ: CSX) rose 3.73% during the day, but was down 1.16% after the close.
If successful, a merger would create a transcontinental colossus.
Union Pacific, headquartered in Omaha, is the largest publicly-held U.S. railroad with a market capitalization of $135.92 billion. It has 32,000 employees operating over 32,000 miles of track in 23 mostly western states.
Norfolk Southern has a market cap of $60.27 billion, with approximately 30,000 employees and a network of 36,000 track-miles in 22 states.
A spokeswoman for Union Pacific said the company would not comment on rumor or speculation. Norfolk Southern did not immediately return messages for reaction.
The last merger among Class I railroads was Canadian Pacific (NYSE: CP) and Kansas City Southern, which was completed in 2023. The previous all-U.S. merger dates to 1999, when NS and CSX divided up Conrail. Union Pacific acquired western carrier Southern Pacific in 1996.
Talk of mergers has increased after Donald Trump was re-elected in 2024, on pledges of a looser regulatory, pro-business administration.
Union Pacific Chief Executive Jim Vena has been vocal in his support of mergers, although other Class I executives have publicly said that tougher rules adopted in 2001 by the Surface Transportation Board (STB) could hinder potential tie-ups. Analysts expect the STB, with four members split event along party lines, to fill its vacant fifth seat with a Republican appointee in 2026.
A number of investment firms have recently jumped into the fray, insisting a carefully-structured proposal with sufficient political support could prove successful.
Activist investor Ancora Holdings tried to wrest control of NS following the disastrous 2023 derailment in East Palestine, Ohio. It failed but did gain several seats on the board, which led to the ouster in 2024 of CEO Alan Shaw.
Subscribe to FreightWaves’ Rail e-newsletter and get the latest insights on rail freight right in your inbox.
Find more articles by Stuart Chirls here.
Related coverage:
Report: Investment firm advising Union Pacific on potential rail merger
