Investor: CSX can now search out ‘willing partner’ for rail merger

The activist investor that called for CSX to dump Chief Executive Joe Hinrichs got its way Monday, and said the company is now positioned to find its own rail merger partner.

“We applaud the CSX Board of Directors for heeding shareholder feedback and terminating former CEO Joe Hinrichs,” Ancora Holdings said in a statement. “This follows Ancora’s disclosure of its August 2025 letter that laid out the facts about Mr. Hinrichs’ value-destructive tenure and urged the Board to terminate him if he could not quickly position CSX to catch up to the railroads that have embraced the need for transcontinental service in the United States.”

Union Pacific (NYSE: UNP) and Norfolk Southern (NYSE: NSC) in July announced their intention to merge in an $85 billion blockbuster deal that would create the first U.S. transcontinental railroad and likely touch off a restructuring of American railroads.

CSX on Monday appointed Linde Chairman Steve Angel to succeed Hinrichs to lead the Jacksonville-based company. Angel guided the former Praxair in its 2018 merger with Linde (NASDAQ: LIN) to form the world’s largest industrial gas conglomerate. He’s the third executive to come out of retirement recently to lead a railroad, after Hinrichs of Ford (NYSE: F) and UP’s Jim Vena.

Politics, policy aligned for merger

“With President Donald Trump and other policymakers recently expressing enthusiasm for the benefits of a transcontinental railroad, CSX and other Class I railroads have no choice but to embrace the industry’s new realities,” Ancora said in the unsigned statement. “Although Steve Angel is not a railroader by trade, his M&A [mergers and acquisitions] pedigree and value creation record indicate his appointment is an initial step in the right direction for CSX.

“We expect the board and Mr. Angel to be far more proactive when it comes to pursuing multiple opportunities to increase shareholder value and identifying a willing partner to merge with.”

Ancora added it expects Angel to evaluate CSX management “in order to restore the operational excellence that was a key tenet of CSX’s past success.”

Short list of rail merger candidates

Ancora did not identify possible merger candidates by name, but it’s a short list. Western carrier BNSF earlier said it wasn’t interested in pursuing a merger with CSX, although the two companies did announce a number of new interline intermodal agreements. Investor Warren Buffett, who heads BNSF parent Berkshire Hathaway (NYSE: BRK-B), typically doesn’t negotiate in the media, and has an aversion to working with investment banks. But his company has hundreds of billions in cash reserves squirrelled away, and could be waiting to see the details of the UP-NS tie-up, and how the Surface Transportation Board will rule on the merger before making its own move.

The only other merger targets would be Canadian Pacific Kansas City (NYSE: CP), which completed its own acquisition of Kansas City Southern in 2023, and Canadian National (CNR.TO). But it’s far from certain, given the strained relations between the U.S. and Canada, whether Ottawa would even consider a consolidation involving the latter, an historic entity that is considered the crown jewel of Canadian transportation.

CN acquired U.S.based Illinois Central in 1998.

Although its stake in CSX is unknown, Ancora said it is continuing to purchase, and that the episode is “a cautionary tale for all corporate leaders who consider putting their own agenda ahead of shareholders’ best interests.”

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Find more articles by Stuart Chirls here.

Related coverage:

Hinrichs out as CSX CEO

Rail regulator wants more time to review UP-NS merger

Intermodal leads weekly U.S. rail traffic decline

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