Investors shrug at $85 billion Union Pacific-Norfolk Southern merger, which would shrink US freight’s Big Four to a Big Three
Union Pacific announced it reached an agreement to buy Norfolk Southern, a deal that would create the US’s first coast-to-coast rail network.
With the proposed $85 billion merger between Union Pacific and Norfolk Southern, America’s first Megazord-style railroad could be on the way.
The merger, which the two companies confirmed last week was being explored, would marry Union Pacific’s western routes with the Midwestern and eastern routes of Norfolk Southern — creating America’s first coast-to-coast network, spanning about 50,000 miles.
As in the game Monopoly, one player having so many railroads is not typically a sign that lower fees are on the way. The combined company would have more than 50,000 employees.
Investors didn’t exactly cheer official details of the merger, and both stocks were down about 3% in Tuesday morning trading.
If approved, the megamerger would be the first between two Class 1 freight railroads since 2023’s $31 billion merger between Canadian Pacific and Kansas City Southern.
Additional consolidation in the industry could follow: rumors have swirled this month of a potential combination of Berkshire Hathaway-owned BNSF and CSX, though Warren Buffett threw some cold water on the reports. Should that merger also come to fruition and both get the OK from antitrust regulators, 90% of US freight rail volumes would be controlled by two companies.
