CSX and Norfolk Southern jump on report Union Pacific is exploring a bid for a rival

Shares of CSX and Norfolk Southern rose after a report said Union Pacific is working with Morgan Stanley to explore a potential acquisition of a rival in a move that could reshape the US rail industry.

The West Coast rail giant declined to comment to Semafor and hasn’t named a takeover target. But if you’re wondering who it might be, there are signs: CEO Jim Vena has hinted at wanting a transcontinental network, which would likely involve one of the two major East Coast carriers. CSX currently has a market cap of about $64.8 billion, while Norfolk Southern is around $60.3 billion.

A merger could help boost route efficiency and claw back lost ground, but getting it past regulators wouldn’t be easy. The deal would face major regulatory hurdles under stricter post-2001 merger rules, but comes at a moment when railroads are under pressure. Freight volumes are down and tariffs are dragging on traffic. Meanwhile, trucking firms continue to dominate the space, moving 70% of all domestic freight.