Union Pacific and Norfolk Southern File $71.5 Billion Merger Application, Kicking Off Tough STB Review
Union Pacific Corporation and Norfolk Southern Corporation officially filed their application with the Surface Transportation Board (STB) on Friday, requesting approval for a landmark $71.5 billion merger. This move initiates the regulatory process to create what the companies describe as America's first transcontinental rail system, promising significant economic benefits, enhanced competition, and protection for union jobs.
Historic Merger Faces Toughest Regulatory Test in Decades
The filing is highly significant because it is the first major merger to be judged under the tougher review rules adopted by the STB in 2001. These rules were established following rapid consolidation in the 1990s, which left the U.S. rail network dominated by regional duopolies—BNSF Railway and Union Pacific in the West, and CSX and Norfolk Southern in the East.
Under the new framework, the merging railroads face a higher burden of proof. They must demonstrate that their combination:
- Enhances Competition: The deal must actively enhance, rather than merely preserve, competition across the rail network.
- Serves Public Interest: The railroads must prove the deal is unequivocally in the public interest.
- Addresses Downstream Impacts: They must address potential consequences, including the possibility that the creation of a transcontinental giant could trigger additional Class I mergers among competitors.
The merger agreement between the two companies was initially executed on July 29, 2025, setting the stage for this critical regulatory filing.
STB Sets January Deadline for Acceptance
The STB has already established a key procedural deadline. The first step in the merger review process requires the STB to determine whether to accept the application for consideration. This decision is scheduled to be made by January 18, 2026. Acceptance would greenlight a comprehensive review process that is expected to be lengthy and complex, given the scale and potential market impact of the proposed combination.
The railroads stated that the combined entity would significantly influence logistics and transportation across the country, aiming to boost efficiency and service reliability for shippers.
Competitors Raise Immediate Concerns Over Competition
The filing drew immediate and sharp criticism from major competitors, who questioned whether the application meets the high bar set by the 2001 rules.
Canadian National (CN) issued a statement on December 19, 2025, arguing that the application is insufficient.
The application filed this morning by Union Pacific and Norfolk Southern fails to demonstrate that the merger would enhance competition or generate significant public benefits that would require a merger. It falls well below both the 2001 and old merger rules set out by the Surface Transportation Board (STB).
CPKC (Canadian Pacific Kansas City) also issued a statement regarding the filing, indicating their close monitoring of the STB’s initial review process. The opposition highlights the industry-wide concern that merging two of the seven remaining Class I railroads could lead to reduced options for shippers and increased market concentration, potentially forcing other major players like CN and CPKC to consider defensive mergers.
If approved, the merger would fundamentally reshape the U.S. rail industry, moving from a system of regional duopolies to one dominated by a single, coast-to-coast entity, forcing regulators to weigh the promised economic efficiencies against the risk of reduced competition.
