Washington, Jul 24 (AP) Union Pacific and Norfolk Southern confirmed Thursday that they are in merger talks that would create a single US railroad with service stretching from the East to the West Coast.
The Associated Press reported last week that the companies were discussing a tie-up but neither company confirmed until Thursday morning.
The potential merger would combine the largest and smallest of the country's six major freight railroads.
There's widespread debate over whether such a merger would be approved by US regulators, which have established a high bar for consolidation in the crucial industry.
That's largely because of the aftermath of an industry consolidation nearly 30 years ago that involved Union Pacific.
Union Pacific merged with Southern Pacific in 1996 and the tie-up led to an extended period of snarled rail traffic on US rails. Three years later, Conrail was divvied up by Norfolk Southern and CSX, which led to more backups on rails in the East.
However, just two years ago, the US Surface Transportation Board approved the first major rail merger in more than two decades. In that deal, which was supported by big shippers, Canadian Pacific acquired Kansas City Southern for USD 31 billion to create the CPKC railroad.
Still, some of the reasoning behind the approval was that it involved two of the smallest major railroads, and Kansas City Southern was the only operator with direct lines into Mexico. The combined railroad, regulators reasoned, would benefit trade across North America.
The deal left only six major freight railroads, however, which could become an issue when regulators consider whether to approve any deal between Norfolk Southern and Union Pacific.
To be approved, any major rail merger must show it will enhance competition and serve the public interest under rules established in 2001, in the wake of that pair of mergers.
Also Thursday, Union Pacific reported that its adjusted profit grew to USD 1.8 billion in the second quarter.
The Omaha, Nebraska company's per-share earnings rose rose to USD 3.03, beating Wall Street expectations and easily topping the USD 2.71 per-share profit it reported in the same period last year. Analysts were expecting profit of USD 2.91 per share for the recent quarter.
Operating revenue grew 2 per cent over last year, to USD 6.2 billion, the company said.
Union Pacific shares fell 2 per cent just at the opening bell Thursday, to USD 226.70 each. They had slumped to around USD 208 in early April, their lowest level of 2025, as President Donald Trump rolled out sweeping tariffs that threatened to upend global trade. (AP) NPK
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