(FARGO, ND) — The largest and sixth largest Class I Railroads in the United States are reportedly in talks of a merger that would connect the East and West Coasts. The Wall Street Journal initially reported, with other outlets picking up on the story, that the Union Pacific and Norfolk Southern are in merger talks to create the largest railroad in North America.
Within the industry, reports are that there is a lot of debate over the merger and whether it would be approved by the Surface Transportation Board. The questions come despite regulators approving the deal that created CPKC railroad two years ago with the Canadian Pacific’s $31 billion acquisition of Kansas City Southern Railroad. That merger combined the two smallest major railroads in North America and left only six major freight railroads. But at the time, it was the first approved merger in 20 years.
Mike Steenhoek, Executive Director at the Soy Transportation Coalition, said in an email to American Ag Network that “railroads – both the large Class I railroads and the regional and shortline railroads – are integral to the success of farmers and U.S. agriculture. Therefore, any major development within the railroad industry is of acute interest to those who supply nutrition and protein to domestic and international customers.”
He added that “many agricultural and other railroad shippers will be concerned that further consolidation in the industry will result in diminished competition among railroads. This could result in increased rates and diminished service.”
Steenhoek also shared that “history tells us that mergers and acquisitions within the railroad industry will inspire and motivate additional mergers and acquisitions. This is an important context to view the potential negotiations between Union Pacific and Norfolk Southern. If such an acquisition/merger were to occur, the energy and momentum toward the remaining two U.S. based Class I railroads – BNSF and CSX – pursuing a merger would be considerable. This would ultimately result in two U.S. based Class I railroads with coast-to-coast service. Many regulators, elected officials, labor unions, and railroad customers will regard this entire discussion as a “package deal” – i.e. the approval of one merger/acquisition among two railroads will inevitably result in the merger/acquisition of the other two. This will cause considerable concern among many of the above constituent groups.”
The merger discussions reportedly began during the first quarter of 2025, according to someone familiar with the talks but not authorized to publicly discuss them. It would combine the largest and smallest of the country’s six major freight railroads. Both railroads declined to comment.
