A multibillion-dollar rail merger may be chugging closer.
Union Pacific (UNP) is in talks to acquire Norfolk Southern (NSC), The Wall Street Journal reported late Thursday, citing people familiar with the matter. The deal would merge companies with a combined market value of roughly $200 billion, based on Visible Alpha data.
The report set both companies’ shares in motion, with Union Pacific recently down 1.7% and Norfolk Southern up more than 3%. Shares of CSX (CSX), which yesterday was the subject of a Semafor story saying it was a possible takeover target, were little changed.
All three companies declined to comment.
A merger might face considerable regulatory hurdles, though experts generally believe President Donald Trump’s administration would be broadly friendly to big deals. Bank of America analysts on Thursday upgraded shares of CSX to a bullish rating, citing “increased potential for M&A discussions to drive valuation interest in US railroads higher.”
It’s been a while since there was a big railway merger. The last, which created Canadian Pacific Kansas City (CP), was in 2023. Its shares were off nearly 4% today.
“We’ve long viewed a transformative transcontinental railroad merger as an intriguing possibility,” Deutsche Bank analysts wrote yesterday while raising their price target on Union Pacific to $272. The stock closed Thursday just below $270. With the latest news, they wrote, “we ascribe a higher probability to the deal.”
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