4 Railroads Object to Union Pacific-Norfolk Southern Merger

Union Pacific wants to acquire Norfolk Southern in an $85 billion deal. (Nati Harnik/Associated Press)

CSX Transportation and three other railroads filed requests this week that the Surface Transportation Board reject Union Pacific Corp.’s application for approval to acquire Norfolk Southern Corp. and return it for more information.

The documents were all uploaded to the STB website. The requests by CSX, BNSF Railway, Canadian Pacific Kansas City Southern and Grand Trunk Railroad cite similar concerns about information they say is lacking in the application filed by UP on Dec. 19.

On Jan. 2, Union Pacific filed its response, saying the information is indeed in its application.

In late July, Union Pacific Corp. and Norfolk Southern Corp. announced they had reached an agreement in which UP would acquire NS in a deal with a market value of $85 billion, after which NS would be absorbed into the UP system.

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Shareholders of Norfolk Southern Corp. and Union Pacific voted Jan. 2 to approve the agreement that allows UP to buy and absorb NS in a deal valued at $85 billion.

On July 30, Union Pacific filed notice with the STB of its intent to file an application for STB approval of its plan to acquire Norfolk Southern. Union Pacific filed its application on Dec. 19. Monday was the deadline for interested parties to file comments challenging the completeness of the application. UP had until noon Friday to file its reply to those challenges.

Shareholders of Norfolk Southern and Union Pacific voted Jan. 2 to approve the agreement.

CSX Objections, UP Responses

UP is most active west of the Mississippi River, where its main competitor is BNSF. It also competes with CPKC in that region. Norfolk Southern operates primarily east of the Mississippi, where CSX is its main competitor.

CSX lists several objections to the application filed by Union Pacific. Among CSX’s assertions the application does not:

• Include the merger agreement between UP and NS, contrary to STB regulations.
• Address (contrary to STB rules) how the merger of UP and NS would affect the two railroads’ main competitors as they react to the UP/NS combination.
• Identify the “additional measures” that would be taken if the anticipated public benefits of the merger fail to materialize.
• Identify the merger’s claimed benefits that could be achieved through means short of a merger.
• “Each of these deficiencies renders the Application incomplete,” CSX concludes in its filing.

BNSF’s filing said the application “only superficially grapples with the serious issues the proposed merger creates for shippers, American businesses, the rail industry, and the American economy. BNSF identifies certain merits issues now because they impact the schedule and information exchange that is needed to address the application.”

BNSF added it is concerned that UP and NS may attempt to supplement their submission to address the many deficiencies in it at a later date without sufficient time for other parties to provide comments and for the STB to fully consider the supplements and comments.

As CSX did, BNSF said UP and NS “all but ignore the merger’s effects on geographic and product competition.”

CPKC and Grand Trunk made similar assertions.

In its 36-page response posted to the STB website on Jan. 2, Union Pacific disputed the assertions of its four competitors. Union Pacific said:

• Despite its competitors' "baseless claims," the application includes the full system analysis as required by STB rules.
• The application "appropriately addresses actual and projected" market shares, geographic competition and vertical competitive effects.
• It addressed how the acquisition of Norfolk Southern would enhance competition.
• The application does include the merger agreement between UP and NS.

Union Pacific has said it expects the STB review process to extend into early 2027.

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