Norfolk Southern and Union Pacific shareholders OK merger. Here’s what’s next.

President Donald Trump has already signaled his support for the deal, which needs federal regulatory approval.

But it isn’t yet a sure deal.

On Friday, a coalition of nine Republican state attorneys general, led by Tennessee and Kansas, wrote to regulators warning of their fears the proposed merger could cause “undue market concentration that stifles competition” and cause higher prices for American manufacturers and consumers.

The companies hope to close the deal by early 2027, but the process still has a long way to go.

The path to approval

The CEO of Union Pacific, Jim Vena has said he’s pushing his team to file the roughly 4,000-page merger application to the Surface Transportation Board by the first of December.

The five-member panel is in charge of the economic regulation of freight rail in the country and is comprised of presidential appointees.

However, two seats on the board are vacant.

One was left empty when Trump fired Robert Primus earlier this year — the lone opposition voice during the most recent 2023 railroad merger. Primus has sued, alleging the termination was unlawful.

Credit: arvin.temkar@ajc.com

Credit: arvin.temkar@ajc.com

Vena met with the president in September, Trump told Fox News.

Vena had told an investor conference in mid-September that based on his meetings in Washington, D.C., top administration officials think “it’s an absolute win for the country.”

Arguments for — and against — the merger

The Surface Transportation Board’s mandate is to “ensure that any approved transaction would promote a competitive, efficient, and reliable national rail system.”

The board “must consider the various goals of effective competition, carrier safety and efficiency, adequate service for shippers, environmental safeguards, and fair working conditions for employees,” its rules state.

Credit: AP

Credit: AP

Union Pacific and Norfolk Southern leaders argue that the largest merger in U.S. history would increase competition by allowing rail to compete better against the trucking industry and remove friction for shippers.

In recent comments to an investor conference, Vena warned of impending pressure on the rail industry from the rise of autonomous long-haul trucking technology.

Credit: AP

Credit: AP

“This is not a pipe dream that you have pie in the sky and you think it might happen. It is happening. In the next few years, we are going to see that competition,” he said.

But in a memo against the merger, Union Pacific’s competitor BNSF warned the deal could cause “supply chain chaos” and consolidate about 45% of rail tonnage within one company.

“The proposed UP-NS merger would concentrate too much control of the nation’s freight market with one railroad leading to long-term harm to competition and resilience in the nation’s supply chain,” it argued in the memo.

Forty members of the American Chemistry Council have also come out against the deal, warning it would disrupt service, increase costs and make U.S. manufacturing less competitive.

Labor unions — which have a large presence at both companies — have had mixed reactions.

Many have yet to take a stance on the proposed merger and will be expected to offer comments after the application is released.

One of the largest unions, SMART-TD came out in favor of the deal last month after securing an agreement that protects all of its members’ jobs.

Another, the National Conference of Firemen and Oilers, came to a similar agreement this week.

Credit: Miguel Martinez

Credit: Miguel Martinez

Why it matters to Atlanta

The proposed mega-railroad company would be headquartered in Omaha, Nebraska, where Union Pacific is based.

It has more than double the market value of Norfolk Southern and about 12,000 more employees.

Credit: Courtesy photo

Credit: Courtesy photo

When Norfolk Southern opened its gleaming Midtown Atlanta headquarters in 2021 after relocating from Virginia, it said it employed about 3,000 there.

It has become a prominent corporate citizen in the metro region, donating millions to charitable causes.

The news of the merger earlier this year has sent anxiety through the company’s Atlanta ranks who are left to wonder about the fate of their jobs, particularly for those who just recently relocated to Georgia.

While company leadership has insisted Atlanta will remain “a core location for the combined organization over the long-term with a focus on technology, operations, and innovation, among other priorities,” it has not disclosed exactly how a merger would impact its Georgia headcount.