Overview

• Union Pacific and Norfolk Southern confirmed on July 24 that they are in advanced, non-binding talks to merge into the United States’ first coast-to-coast freight railroad.
• Union Pacific’s robust second-quarter results—net income rose to $1.9 billion on $6.2 billion in operating revenue—underpin management’s expansion strategy.
• Both companies cautioned there is no guarantee a transaction will be finalized or that terms will be agreed.
• Any deal would require lengthy Surface Transportation Board approval under enhanced competition criteria and is likely to face opposition from major railroad unions.
• Industry precedents and input from influential shippers such as Amazon, Dow and U.S. Steel will factor heavily into regulators’ review and the merger’s strategic rationale.