Union Pacific secures CN’s backing for $85 billion Norfolk Southern takeover

Union Pacific has won the support of Canadian National (CN) for its proposed $85 billion acquisition of Norfolk Southern, a deal that would create the first U.S. transcontinental railroad. The Surface Transportation Board (STB) is reviewing the merger, which critics argue would give the combined entity control over more than 40% of U.S. rail traffic, reducing the number of major freight railroads from seven to five. BNSF, CPKC, and CSX have all opposed the merger. CN’s support came after Union Pacific agreed to concessions, including granting CN access to tracks between St. Louis and Kansas City, a key rail yard in Kansas City, and Norfolk Southern’s smaller railroads in those cities. These concessions aim to address competitive concerns by ensuring CN can serve customers facing reduced shipping options post-merger. Union Pacific CEO Jim Vena stated that the agreements with CN strengthen the case for the merger, emphasizing that it would improve efficiency and reduce congestion, particularly in Chicago. CN President and CEO Tracy Robinson highlighted the need for meaningful competition and customer choice amid industry structural changes. The STB, which is reviewing the deal under stricter 2001 merger standards, has requested additional information from the railroads by the end of July before proceeding. Shippers remain divided, with some anticipating faster cross-country deliveries and others, particularly in chemical and agriculture sectors, fearing higher rates and service disruptions.