Union Pacific, the largest U.S. railroad, and Norfolk Southern could announce a tentative merger agreement as early as next week, according to a published report.
Bloomberg cited sources familiar with the talks in its report Friday.
Omaha-based UP (NYSE: UNP), the largest Class I railroad and NS (NYSE: NSC), headquartered in Atlanta, recently confirmed that they have been in advanced discussions regarding a merger that if successful would create the first transcontinental railroad. A proposed consolidation would produce a rail colossus with $200 billion in annual revenue.
Union Pacific and Norfolk Southern did not immediately respond to messages from FreightWaves seeking comment.
It’s also likely that competitors such as BNSF, CSX (NASDAQ: CSX), CN (NYSE: CNI), and CPKC (NYSE: CP) would importune the Surface Transportation Board, which will ultimately accept or reject the deal, for concessions to balance any emerging competitive issues. Industry observers have said that CN, in particular, could seek access to Mexico, after CPKC’s 2023 tie-up with Kansas City Southern made it the first run-through tri-border carrier.
In a published timeline guide, the STB estimates the review process could take as long as 22 months once formal filings are submitted.
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