Railroad Giants Explore Merger; Chip Maker Speeds Up U.S. Expansion

Railroad operator Union Pacific is holding talks to acquire its smaller rival Norfolk Southern in a deal that could create the largest rail operator in the country.

The WSJ’s Lauren Thomas and Ben Glickman report that the talks are early stage and there are no guarantees they will result in any deal or receive regulatory signoff, according to people familiar with the matter. It is also possible another suitor could emerge.

Union Pacific has a market value of some $140 billion, while Norfolk is valued at about $60 billion.

The deal would create a sprawling rail network that spans the continent and handles a sizable share of freight across the U.S. Currently, no railroad operator has a network that runs coast to coast in the U.S.

Union Pacific Chief Executive Officer Jim Vena has said publicly that a transcontinental railroad would improve service by smoothing out delays at interchanges, when a railroad operator transfers railcars to another operator.

Still, any deal would face serious scrutiny from a series of regulators, though analysts have speculated that Union Pacific is likely entertaining a merger proposal in part because of a more favorable regulatory environment under President Trump.

• A demand by Norfolk Southern is hiking the price of a railyard being built to support cargo shipments through the Port of Charleston. (South Carolina Daily Gazette)