Norfolk Southern and Union Pacific confirmed today that the companies are engaged in “advanced discussions regarding a potential business combination.”
“There can be no assurances as to whether an agreement for a transaction will be reached or as to the terms of any such transaction,” Norfolk Southern said in a release. “Union Pacific and Norfolk Southern stated that they do not intend to make additional comments or provide an update on this matter unless and until they determine that disclosure is required or otherwise appropriate.”
The merger, if approved, would dramatically reshape the country’s rail landscape, uniting two of the nation’s six Class I railroads, creating the first coast-to-coast rail company.
According to reports, Union Pacific, which primarily operates west of the Mississippi River, has retained Morgan Stanley to advise it. The railroad is also seeking to lobby advocates to support the proposal and help navigate the complex regulatory environment.
The proposal would almost certainly face significant regulatory scrutiny. The Surface Transportation Board has maintained strict guidelines since 2001, following a series of mergers in the 1990s that led to just a handful of Class I railroads.
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