Update: Union Pacific, Norfolk Southern confirm merger talks

The Surface Transportation Board (STB) has not received a prefiling notification or application related to any proposed major merger, including between Union Pacific Railroad and Norfolk Southern Railway, a board spokesperson confirmed today.

The two Class Is yesterday confirmed media reports that they're involved in "advanced discussions" about a possible merger. The Wall Street Journal and other national media last week reported that UP was exploring an acquisition of smaller rival NS. In a call with analysts to discuss UP's Q2 2025 financial results, UP CEO Jim Vena said there are no assurances an agreement will be reached. Both companies said they do not intend to comment further.

NS will release its Q2 2025 financial results on July 29.

"Under federal law, rail mergers involving Class I railroads must be formally submitted to the STB for review," an STB spokesperson said today in an email. "The agency's regulations require a prefiling notification be submitted between three and six months prior to a merger application."

The STB is the economic regulator of railroads. Should an application be filed, the board will evaluate whether the merger would serve public interests. The evaluation would include a thorough review of competitive effects, potential service impacts and other critical considerations, the spokesperson said. 

"The board's review process will include opportunities for public participation and comment," they added.

The last Class I merger before the board was the Canadian Pacific's acquisition of Kansas City Southern, creating Canadian Pacific Kansas City (CPKC). After a two-year process, the STB approved the merger in March 2023.

A UP-NS merger would create the largest railroad in North America and the only one to connect the U.S. East and West coasts. In the past, Vena has expressed support for the concept of a transcontinental rail network and the long-term value such a combination could deliver, Baird Equity Research Industrial said last week in a note to investors. In comments yesterday on UP's Q2 financial results, Baird analysts reiterated what they said in their July 17 note that they believe the merger discussions to be a "public vetting process."

The UP-NS discussions have been underway since first-quarter 2025, they said.

Tony Hatch, an independent transportation analyst and program consultant for Progressive Railroading’s RailTrends® conference, said in a July 22 note to clients that the STB historically looks only at the potential impact proposed railroad mergers would have on rail competition, while ignoring the impact on highways and waterways. In his opinion, that STB view has been to the railroads' detriment, Hatch wrote.

For now, there are a lot of unknowns regarding a UP-NS deal, Hatch said yesterday in an email.

"The news is that they are in advanced talks (negotiations) but we knew last week they were in talks," he said. "Still not sure [is] what they know about the risk/reward ... that we don't know; and how to satisfy the 'enhanced competition' factor."