Norfolk Southern shares jump 7% postmarket after RWSJ report

Norfolk Southern shares jump 7% postmarket after RWSJ report

Norfolk Southern Corporation's (NSC) shares surged by 7% in postmarket trading on July 2, 2025, following a report by Semafor [1] that Union Pacific (UNP) is exploring a potential acquisition of a rival in the U.S. rail industry. The report, citing sources familiar with the matter, stated that Union Pacific is working with Morgan Stanley to evaluate a possible deal for a rival.

The news sent shares of Norfolk Southern higher, with the stock gaining 7% in postmarket trading. As of their closing prices on Wednesday, Norfolk Southern was valued at $58 billion. The report did not confirm which company Union Pacific was looking to acquire, but Norfolk Southern and CSX (CSX) were mentioned as potential targets due to their East Coast presence and the potential for a transcontinental railroad network.

Union Pacific's CEO, Jim Vena, has previously hinted at wanting a transcontinental network, which would likely involve one of the two major East Coast carriers. A merger could help boost route efficiency and claw back lost ground for the rail industry, which has been under pressure due to decreased freight volumes and increased tariffs. However, getting such a deal past regulators would not be easy, given the stricter post-2001 merger rules.

While Trump's White House was friendlier to large mergers compared to the previous Biden administration, the sheer size of Union Pacific and the involvement of unions may raise questions about the future of the potential deal. Union Pacific could argue to regulators that a coast-to-coast railroad would better compete against the trucking industry, which still handles more than 70% of domestic freight.

Retail sentiment on Stocktwits about Norfolk Southern was in the 'bullish' territory, while traders were 'bearish' about CSX. Union Pacific stock has gained marginally this year, while Norfolk Southern has gained 9.6%.

References:

[1] https://sherwood.news/business/csx-and-norfolk-southern-jump-on-report-union-pacific-is-exploring-a-bid-for/
[2] https://newsable.asianetnews.com/markets/csx-norfolk-southern-gain-premarket-after-report-says-union-pacific-exploring-a-buyout-of-a-rival-articleshow-5kbt7bd