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Why a Union Pacific–CSX or NSC Merger Might Actually Go Through

Union Pacific (NYSE: UNP) is reportedly shopping for a mega-merger. The sensible suspects? CSX (NASDAQ: CSX) and Norfolk Southern (NYSE: NSC).

At first glance, this feels like a regulatory suicide mission—because nothing says “please investigate me” like combining the largest western freight railroad with one of the two major eastern ones.

But what if—just maybe—this is the rare time when a massive merger actually clears the gate?

Heck, if Southwest was able to buy AirTran years back, maybe a UNP-CSX or UNP-NSC deal gets approved.

Yes, I said it: the deal might actually go through.

Here’s why.

Remember: big doesn’t always mean bad or illegal from a regulatory standpoint.

1. There’s Almost No Geographic Overlap

Let’s start with the biggest misconception: that this would somehow reduce competition coast-to-coast.

It doesn’t.

• Union Pacific operates west of the Mississippi—its easternmost reach barely hits Chicago, St. Louis, and Memphis.

• CSX and Norfolk Southern split the eastern U.S., running from Florida and the Southeast through the Midwest to the Northeast.

• They intersect only at a few interchange points—not in actual freight lanes or customer coverage areas.

Translation? No customers lose a competitor. No shippers get squeezed in their local markets. There’s no real duplication of service.

If anything, a merger could increase service options across longer routes.

2. The CP–KCS Merger Was a Precedent-Setter

In 2023, Canadian Pacific got the green light to merge with Kansas City Southern, creating a seamless north-south rail from Canada to Mexico.

That deal had minimal overlap—and the Surface Transportation Board (STB) blessed it largely for that reason.

A UNP–CSX or UNP–NSC deal would mirror the same structure:

• Connecting separate regional networks

• Enabling end-to-end through service

• Avoiding horizontal consolidation

The STB can’t approve CP–KCS and then deny this purely on size—not without looking inconsistent.

3. The STB’s Own Guidelines Emphasize Service Gains Over Size

Post-2001, the STB tightened its merger rules to protect shippers. Fair. But the guidelines actually allow a merger if it improves service and doesn’t reduce competition.

A coast-to-coast UNP–CSX, for example, could:

• Cut interline handoff delays

• Reduce congestion in interchange hubs (like Chicago)

• Provide faster, more reliable long-haul transit

• Improve network resiliency for ports and exporters

In other words: if the railroads make the right case—with detailed shipper support letters, service improvement guarantees, and competitive safeguards—the STB’s framework doesn’t actually forbid this deal.

It might even, dare I say, encourage it.

4. The DOJ Will Bark—But the STB Has the Leash

Yes, the Department of Justice will growl. They’ll say something to the extent of this merger is “too big,” “too scary,” and “anti-competitive.”

But the DOJ is not the final authority here. The STB is.

And unlike the FTC or DOJ, the STB is industry-specific, deeply familiar with rail operational dynamics, and has a track record of approving structurally complementary deals that the broader antitrust world wouldn’t touch.

If the applicants frame it as service-enhancing, efficiency-boosting, and non-overlapping, the DOJ can bark all it wants—but the STB can still give a full-speed-ahead.

5. Shippers Might Actually Like It

Rail shippers have been pretty clear lately:
They want reliability, transparency, and fewer interline delays.

This merger could deliver on all three:

• Faster coast-to-coast movement without handoffs

• Better data and tracking across unified systems

• Less finger-pointing when something goes wrong

If the railroads line up shipper support early, they can defang the biggest political argument against the merger: that it hurts the people who rely on the network.

6. We Already Live in a De Facto Duopoly

Let’s not kid ourselves:

• You’ve got BNSF in the West

• And a tag team of CSX and NSC in the East

• UNP and BNSF already dominate the West in a near-bilateral setup

This deal wouldn’t suddenly create a monopoly—it would just rearrange the pieces into a more integrated grid.

If BNSF ever makes a similar eastward move, would the STB say no then, too?

At some point, they have to acknowledge the real-world structure and stop pretending competition is being gutted when the lanes never overlapped to begin with.

Final Verdict: Not a Fantasy, Just an Execution Problem

This isn’t Amtrak trying to go private. This isn’t Facebook buying Google.

This is a credible, contiguous, and arguably pro-service merger between two non-overlapping networks in an industry where consolidation has already happened.

Yes, it will take:

• Tremendous legal prep

• Pre-baked shipper support

• Detailed interoperability plans

• Public pressure management

But it’s not structurally impossible—and in fact, it’s arguably easier to justify under STB law than many think.

Bottom Line for Investors

If you’re betting on this potential merger:

• Watch what UNP does next quarter. If they start holding informal talks with the STB or key stakeholders, take it seriously.

• If shipper groups stay quiet or neutral? That’s a green flag.

• And if CSX or NSC start paring back standalone capital plans? They might be dressing for the altar.

The odds are still tough and we are still very early in the process. But if you’re betting on long-shot M&A in this space?
This may not be the worst horse in the race.

DISCLAIMER: This analysis of the aforementioned stock security is in no way to be construed, understood, or seen as formal, professional, or any other form of investment advice. We are simply expressing our opinions regarding a publicly traded entity.

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