by Esther Fung, Wall Street Journal
Omaha, NE — Union Pacific UNP -4.29%decrease; red down pointing triangle and Norfolk Southern NSC -0.10%decrease; red down pointing triangle said that they are in advanced talks over a merger that could create the largest rail operator in the country.
The companies said Thursday that there were no guarantees that the discussions would result in any deal or about what the terms would be. The joint announcement confirms a Wall Street Journal report last week that Union Pacific was holding talks to acquire the smaller, rival railroad operator.
The deal, if completed and approved, would create a sprawling rail network that spans the continent from coast to coast–something no single railroad operator’s network currently does. Union Pacific has a market value of around $140 billion, while Norfolk is valued at about $60 billion.
Still, any deal would face serious scrutiny from a series of regulators, as well as the Justice Department, investors, Amtrak and labor unions. The last merger of two major railroads, which created the present-day Canadian Pacific Kansas City, took around two years to secure regulatory approval after the companies announced the deal.
The Surface Transportation Board, the economic regulator that oversees freight railroads, said Thursday that it hadn’t received any formal notification or application for a new proposed railway-operator merger.
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