President Donald Trump on Friday said he approved of the proposed $85 billion merger between Union Pacific and Norfolk Southern.
In Oval Office remarks reported by White House media, Trump said the tie-up that would create the first transcontinental freight railroad “sounds good to me. Union Pacific is a great railroad.”
It was the latest move by the administration to back the merger, which was jointly announced by UP (NYSE: UNP) and NS (NYSE: NSC) in late July.
Trump met with UP Chief Executive Jim Vena last week in the Oval Office, when he first expressed support for the Omaha-based company’s acquisition of NS, headquartered in Atlanta.
The consolidation of western UP, the largest U.S. railroad, and NS would create a vast network of 52,000 miles of track in 43 states. It would offer shippers single-line transit for freight which they claim would eliminate delays at key interchange points, attract more business and help jumpstart growth.
While major intermodal companies have thrown their support behind the merger, thousands more shippers ranging from manufacturers to agri-businesses and energy producers have voiced their opposition, charging the deal would eliminate competition while raising freight costs and compounding service issues.
Since the announcement, competing railroads have introduced new intermodal partnerships, to demonstrate that collaboration is preferable to a complicated merger. In response, UP and NS rolled out new interline services of their own.
The proposal is subject to review by the Surface Transportation Board; UP and NS earlier said that they could submit their formal application as soon as late October. The deal will be the first subject to tougher merger rules but industry observers have speculated that Trump’s support could accelerate the review process.
Trump last month fired STB member Robert Primus, a Biden appointee who had been the lone vote against the 2023 merger between Canadian Pacific and Kansas City Southern. Last week Trump re-nominated Michelle Schultz to the regulator, and also tabbed railroad industry consultant Richard Kloster to an initial term of an open seat.
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