Union Pacific and Norfolk Southern are reportedly eyeing a potential merger.
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 Wall Street Journal reported that Union Pacific Chief Executive Officer Lance Fritz has recently discussed the benefits of a true transcontinental line.
“History teaches that mergers and acquisitions within the railroad industry will inspire and motivate additional M&A,” Reuters quoted Mike Steenhoek, executive director of the Soy Transportation Coalition, as saying.
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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