Report: Union Pacific in talks to acquire Atlanta-based Norfolk Southern

In 2018, Norfolk Southern announced it would move its corporate headquarters to Atlanta. It opened its current $575 million headquarters building in Midtown in 2021, where it employs more than 3,000 people

The Wall Street Journal reported talks are “early stage” and there is no guarantee they will result in a deal or get approval from regulators, citing people familiar with the matter.

Joining Union Pacific, which has rail lines spread across the Midwest and West, with Norfolk Southern, which covers much of the East, would create a rail network spanning much of the country.

That could create the largest railroad in the U.S. “It would potentially make it the most competitive railroad in the country,” wrote CFRA Research analyst Emily Nasseff Mitsch in a research note for investors.

“We note that any deal would face serious review from regulators, such as the U.S. Department of Justice, as well as investors, Amtrak, and labor unions,” she added.

Ron Kaminkow, a recently retired engineer and trustee for Railroad Workers Union, said the possible further consolidation of the industry concerns him.

“There were 40 Class 1 carriers in 1980 when I entered the job market,” he said. “We’re down to 6. And if they have their way, we’re down to 4.”

These “megamergers,” he said, risk putting more of the nation’s economy in fewer hands, which affects shippers and consumers.

Kaminkow acknowledged that a transcontinental railroad would be more “efficient,” given how difficult it can be to hand off cargo at gateway terminals where railroad company territory boundaries meet. But he supports publicly owned railroads, like many other countries across the globe.

The merger possibility was “definitely” influenced by the new administration in Washington, he added.

With a Republican at the helm of the Surface Transportation Board, some industry insiders say they believe the administration would be more palatable to further consolidation, Trains.com reported.