Union Pacific, Norfolk Southern defend $85 billion merger before regulators

Union Pacific and Norfolk Southern defended their $85 billion merger before the Surface Transportation Board. The deal would create the first coast-to-coast freight rail operator in the United States and deliver large cost savings for shippers. The two railroads said the combined network would link more than 50,000 route miles across 43 states and connect about 100 ports, while the agreement values Norfolk Southern at about $320 per share.

The companies would be willing to divest ownership stakes in smaller railroads if the board requires it, including the Terminal Railroad Association of St. Louis, the Kansas City Terminal Railway and TTX Company. They would not control those entities after the merger and would sell any interests they hold if regulators direct them to do so. Their case centers on an estimated $3.5 billion in annual savings for shippers, improved service reliability and the removal of roughly 2.1 million trucks from highways. The companies argue the deal would benefit the public while preserving union jobs.

The filing lands inside a tougher regulatory framework created in 2001 after service problems tied to the Union Pacific-Southern Pacific merger and the CSX and Norfolk Southern split of Conrail. Under those rules, major rail merger applicants must show the deal is in the public interest and that competition will be enhanced where needed to offset harms. The board accepted the revised application on May 28 and ordered supplemental information by July 27, after rejecting the original filing in January as incomplete.

BNSF Railway warned customers in January that the merger posed serious risks to competition, service and supply chains. The American Chemistry Council said the proposal could put nearly half of U.S. rail traffic under a single carrier. The National Industrial Transportation League, whose members generate roughly $878 billion in gross revenues and spend billions annually on freight transportation, opposed further consolidation in April, and a coalition against the deal launched on April 29.

President Donald Trump has publicly backed the merger, removed Democratic board member Robert Primus from the board and installed Republican Patrick Fuchs as chairman. Union Pacific and Norfolk Southern expect to close the deal in the first half of 2027 and will file more answers later this month.