Union Pacific, a US freight rail giant, announced on Tuesday that it has reached an agreement to acquire Norfolk Southern in a deal worth $85 billion. The merger would create the country’s first coast-to-coast rail network spanning 50,000 miles across 43 states.
The combined company would deliver freight faster by eliminating the need for switching between railroads and opening new routes. Union Pacific operates west of the Mississippi River, while Norfolk Southern tracks are mostly east of it.
Industry experts say the merger will make railroads more efficient and add reliability, which is a major issue in the industry. However, some analysts fear that the deal may reduce competition, as the combined company would account for around two-fifths of rail freight.
Union Pacific and Norfolk Southern customers, such as large companies shipping coal and consumer goods, are concerned about the potential increase in rates due to the merged railroad’s power. The merger would cut the number of major freight railroads in the US from six to five.
Federal regulators will review the deal to assess whether it undermines competition. The Surface Transportation Board can require actions aimed at limiting Union Pacific and Norfolk Southern’s influence, such as giving competitors the right to run trains on their merged network.
The deal has sparked concerns about job security and safety. Rail unions have expressed concern that the merger might undermine safety and threaten jobs. However, union leaders say they support the merger when it comes with increased hiring.
The US rail industry is dominated by a few companies, and this merger could further concentrate power in the hands of a few players. Logistics experts say even if four major railroads become two, they would still face competition from trucking for goods moved in containers.
Source: https://www.nytimes.com/2025/07/29/business/union-pacific-norfolk-southern-merger.html