OMAHA, Neb. — Union Pacific and Norfolk Southern are reportedly in preliminary talks to merge, a move that could create the largest railroad in North America and link the East and West coasts under a single rail operator.
A source familiar with the discussions, who was not authorized to speak publicly, confirmed the talks but noted that neither company has commented on the potential deal.
The merger would unite Union Pacific, the largest U.S. freight railroad, with Norfolk Southern, the smallest of the six major rail carriers. While the idea has sparked industry speculation, it also raises questions about whether federal regulators would allow such a deal to proceed.
The Surface Transportation Board (STB), which oversees rail mergers, previously approved Canadian Pacific’s $31 billion acquisition of Kansas City Southern in 2023, forming the CPKC Railway. That deal, however, involved the two smallest Class I railroads and was not subject to the more stringent post-2001 merger rules. Any proposed merger between two larger carriers must demonstrate enhanced competition and a clear public benefit.
Union Pacific CEO Jim Vena has previously touted the potential advantages of consolidation, arguing that it could improve freight efficiency by reducing handoffs between railroads. But critics, including shipping customers and industry groups, worry that fewer rail options could drive up costs and reduce service quality.
Citi Research analyst Ariel Rosa warned that such a large-scale merger would be "costly and time-consuming," potentially tying up executives for years and drawing opposition from regulators, lawmakers, labor unions, rival railroads, and customers.
Union Pacific, headquartered in Omaha, reported $24.3 billion in revenue last year and employs more than 30,000 people. Atlanta-based Norfolk Southern reported $12.1 billion in revenue with a workforce of approximately 20,000.