Union Pacific Eyes Major Acquisition, Raising Possibility of CSX or Norfolk Southern Acquisition

Union Pacific Corporation is considering a major acquisition, with investment bankers at Morgan Stanley involved. The target of the acquisition is not specified, but the report suggests that Union Pacific is looking to acquire either CSX or Norfolk Southern. The acquisition could be a significant move in the rail industry, as Union Pacific is one of the largest railroads in the US.

Union Pacific Corporation (NYSE:UNP), one of the largest publicly traded railroads in the United States, is reportedly exploring a significant acquisition. The company has hired investment bankers from Morgan Stanley to evaluate potential targets, according to sources familiar with the matter [1][2][3][4]. The acquisition could involve either CSX Corporation (NASDAQ:CSX) or Norfolk Southern Corporation (NYSE:NSC), creating the country's first coast-to-coast railroad carrier.

The potential deal would be substantial, with CSX valued at approximately $62 billion and Norfolk Southern at around $58 billion [1]. Union Pacific CEO Jim Vena has previously discussed the benefits of a transcontinental railroad network, which would combine Union Pacific's western network with one of the two East Coast carriers [2][3][4]. Such a merger would significantly transform the competitive landscape of the freight transportation sector.

Regulatory approvals would be necessary for the acquisition, including the blessing of the Surface Transportation Board (STB). The STB is currently divided along party lines, with two Republicans and two Democrats on the board. Analysts do not expect a third Republican member to be nominated and confirmed before next year, potentially delaying any merger until after a third Republican is seated on the board [2].

The Trump administration's stance on mergers in the rail industry is also a factor. While the Republican chair of the STB has expressed openness to a transcontinental merger, the deal would also need approval from the Justice Department, union groups, and President Donald Trump [3]. The acquisition would represent a high-profile test of the administration's appetite for mergers.

The potential acquisition by Union Pacific comes after a wave of mergers in the 1980s and 1990s. Conventional wisdom suggested that regulators would not allow further mergers among "Class I" railroads, but the Trump administration's push to increase American industrial competitiveness has opened a window for such deals [3]. An argument that Union Pacific would likely make is that a coast-to-coast railroad would be more competitive against the trucking industry, which still handles more than 70% of domestic freight [3].

The acquisition, if successful, would have significant implications for the rail industry and the broader freight transportation sector. It would create a new major player in the market and potentially reshape the competitive landscape.

References:
[1] https://finance.yahoo.com/news/csx-norfolk-southern-stocks-rise-124544761.html
[2] https://www.trains.com/trn/news-reviews/news-wire/report-union-pacific-hires-investment-firm-to-provide-merger-advice/
[3] https://www.semafor.com/article/07/16/2025/union-pacific-has-hired-bankers-for-possible-railroad-bid
[4] https://finance.yahoo.com/news/union-pacific-hired-bankers-possible-222925255.html