Union Pacific and Norfolk Southern told a federal regulatory agency on Tuesday that they are prepared to sell off their ownership interests in certain smaller railroad companies as part of their proposed $85 billion merger deal.
If approved, the combination would establish the first freight rail network in the United States stretching from coast to coast.
The two companies said they would no longer hold controlling interests in the Terminal Railroad Association of St. Louis, the Kansas City Terminal Railway, or TTX Company following the merger. Those smaller railroads are jointly owned alongside other major carriers and are run by independent management teams.
Both railroads told the Surface Transportation Board they would divest their stakes in those lines if the agency required it. The companies also claimed that rival major carriers are using those smaller railroads — particularly the Terminal Railroad Association of St. Louis — as a tool to slow down or block the merger.
Union Pacific and Norfolk Southern said they plan to submit additional responses to Surface Transportation Board questions by July 27 and expect the deal to be finalized in the first half of 2027.
Supporters of the merger say it would save freight shippers an estimated $3.5 billion per year, improve the reliability of service, shift cargo from trucks to rail, preserve options for shippers, and protect union jobs while delivering broader benefits to the public.
However, opposition to the deal is significant. Freight shippers worried about rising costs, along with attorneys general from several states, have raised concerns about the proposed consolidation.
The railroads project that the combined network would remove approximately 2.1 million trucks from American roads, with cost savings potentially leading to lower prices for consumers.
The merger could fundamentally reshape the U.S. freight rail industry by streamlining operations and reducing interchange delays at major hubs such as Chicago.
Active lobbying against the deal continues from major competitors BNSF Railway and Canadian Pacific Kansas City.
President Donald Trump has publicly expressed support for the merger. He previously removed Democratic board member Robert Primus from the Surface Transportation Board — a member who could have opposed the deal — and named Republican Patrick Fuchs as the agency’s chairman, a move widely viewed as making the regulator more likely to approve the transaction.
