Union Pacific announces bid for Norfolk Southern to create transcontinental railroad

OMAHA, Neb. (AP) — Union Pacific is seeking to buy Norfolk Southern in a deal valued at $85 billion in a merger that could trigger the final wave of railroad mergers across the country.

The merger would create the first transcontinental railroad in the United States worth more than $200 billion. The railroads said the tie-up would streamline deliveries of raw materials and goods across the country.

Any deal would be closely scrutinized by antitrust regulators that have set a very high bar for railroad deals after previous consolidation in the industry led to massive backups and snarled traffic.

But if the deal is approved, the two remaining major American railroads — BNSF and CSX — will face tremendous pressure to merge so they can compete. The continent’s two other major railroads — Canadian National and CPKC — may also get involved.

Union Pacific CEO Jim Vena, who has been championing the potential benefits of a rail merger, said this deal could make it possible for lumber from the Pacific Northwest and plastics produced on the Gulf Coast and steel made in Pittsburgh to all reach their destinations more seamlessly.

“Railroads have been an integral part of building America since the Industrial Revolution, and this transaction is the next step in advancing the industry,” Vena said.