Union Pacific, Norfolk Southern explore cross-continental railroad merger, source says

Source: msn/Reuters

11h


NEW YORK (Reuters) -Union Pacific, the largest U.S. freight railroad operator, is exploring a possible acquisition of Norfolk Southern to create a $200 billion coast-to-coast rail network, a person familiar with the matter said. Talks are in early stages, the person said, with no guarantee talks will progress or that any deal would pass what would be expected to be a lengthy, detailed regulatory review. The two companies declined to comment.

Any deal to unite two of the six largest freight rail operators in North America is likely to draw intense regulatory scrutiny. Major shippers in the steel, chemical and grain industries are expected to lobby against any further concentration in an industry that has consolidated from over 100 Class I railroads in the 1950s to just six today.

Union Pacific shares fell 2.7% in Friday afternoon trading, while Norfolk Southern rose 1.52%.

A combination would mark a shift in the U.S. freight rail landscape, creating a single-line network stretching from coast to coast, changing the current divide between western and eastern regional operators. Norfolk is recovering from a tumultuous past couple of years that included the firing of its previous CEO amid ethics investigations, a boardroom battle with activist Ancora, and a train derailment that cost the company about $1.4 billion.

Read more: https://www.msn.com/en-ca/money/general/union-pacific-norfolk-southern-explore-cross-continental-railroad-merger-source-says/ar-AA1ISo8p