Overview
- A binding memorandum of understanding announced late Wednesday has CN withdrawing its formal opposition to Union Pacific’s proposed $85 billion acquisition of Norfolk Southern in exchange for access and asset transfers.
- Under the deal CN will acquire Norfolk Southern’s stakes in the Kansas City Terminal Railway and the Terminal Railroad Association of St. Louis and gain new rights to serve customers between St. Louis and Kansas City, use UP’s Neff Yard, run between Tuscola and East St. Louis, and operate between Memphis and Eagle Pass.
- Union Pacific will receive expanded operating rights over CN’s Elgin, Joliet & Eastern corridor through Chicago as part of the swap of routes and terminals.
- The memorandum is explicitly conditional on Surface Transportation Board approval and the merger’s closing, and the STB has already demanded more information including filings on employment and competitive effects before it will proceed.
- Rivals and some shippers remain critical, saying the arrangement still concentrates market power—critics point to estimates that the combined UP–NS network would handle roughly 40–50% of traffic—and they argue many of the claimed competitive fixes could be done without a full merger.