Union Pacific Said to Be Exploring Deal for Norfolk Southern
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Union Pacific Corp. is exploring an acquisition of Norfolk Southern Corp., setting up what could rank as the largest railroad deal ever, according to people familiar with the matter.
The talks are at an early stage, and there’s no guarantee the companies will reach a deal, the people said, asking not to be identified because the information is private.
A deal would merge two of the largest U.S. railroads, with a combined market value of almost $200 billion.
Shares of Norfolk Southern, which has a market capitalization of about $61 billion, rose 4% after regular trading July 17 in New York. Union Pacific, valued at $136 billion, was up 0.7%.
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Representatives for Union Pacific and Norfolk Southern declined to comment. The talks were reported earlier by The Wall Street Journal.
Speculation has been growing about a large merger in the North American rail industry under the assumption that regulators will be more amenable to consolidation under President Donald Trump. Union Pacific CEO Jim Vena said at an industry conference in June that he would like to do large-scale M&A but acknowledged the complex political and regulatory hurdles for any such deal.
After years of consolidation in the industry, any rail merger likely would be heavily scrutinized by regulators.
