News / Rival railroads cheer as STB rejects 'incomplete' UP-NS merger

Photo: © Steve Estvanik

Union Pacific’s $85bn tie-up with Norfolk Southern has hit a snag: the US Surface Transportation Board (STB) returned its merger filing as ‘incomplete’, leading to yelps of delight from the railroad’s key competitors.

It follows a series of separate, but broadly aligned, filings to the STB from BNSF, Canadian Pacific Kansas City (CPKC), Canadian National (CN), and CSX this month, urging the board to reject the merger filing on the basis it was incomplete.

The STB said: “The board finds that the application seeking approval for Union Pacific to acquire control of Norfolk Southern, and through that entity Norfolk Southern Railway Company and its rail subsidiaries, is incomplete.

“The board therefore must reject the application (and two related applications) and does so without prejudice to refiling. Applicants may submit revised applications in this docket, which would commence a new review.”

Giving its reasoning, the STB said the application lacked the full merger agreement, including details on its obligations and its ability to cancel the deal; describing associated acquisitions the STB considers “significant” as “minor” and the absence of market share projections.

Even so, the STB has suggested that the deal is far from collapsed, noting that the decision “solely” concerns the 19 December application, “and should not be read as an indication of how the board might ultimately assess any future revised application”.

CN said: “UP and NS failed to meet basic requirements when it came to providing all the necessary information in their initial filing. Simply put it is missing the last mile. This decision reinforces that a merger of this scale cannot be assessed on omissions or partial disclosure and must be evaluated on a full and transparent record, as required by the heightened standards under the new merger rules.”

Union Pacific now has until 17 February to indicate if it will refile an amended application, which would be due by 22 June, with suggestions that it could take the carrier up to three months to complete the application “in a manner befitting what is sought by the STB”.

Meanwhile, the US National Grain and Feed Association said: “The NGFA has gathered feedback and perspectives from members with varying viewpoints on the merger proposal since it was announced in July 2025.

“Based on that feedback, NGFA previously urged UP to supplement its filing last month with greater detail on how the proposed transaction would enhance competition and provide robust service assurances, including clearer justification for measures considered and rejected.”

President Trump may be committed to getting the deal over the line – his support exemplified by his decision to remove STB member Robert Primus, who had expressed opposition to further railroad consolidation – but it has been far from plain sailing for the carrier.

This latest move by the STB follows opposition to the deal from a wave of Republican state attorneys general, who warned that it threatened “America First” as well as a plethora of union objections, although the STB’s comments suggest there remains hope of a deal.

Should they pull it off, the NS-UP merger would be the largest in railroad history; certainly shareholders seen keen on the deal, with 99% backing the move to create the first coast-to-coast US transcontinental railroad, but any deal is not expected to close until at least 2027.