The Surface Transportation Board has unanimously accepted Union Pacific and Norfolk Southern’s merger application for consideration after finding the rail companies’ second attempted application sufficient, kicking off a formal review of the proposed deal.
The three-member panel decided to allow the revised merger application to be considered through a formal review process but also called on the companies to provide more information on enhanced competition, public benefits, market share projections, and other merger impacts.
The board has temporarily paused further proceedings while tasking UP and NS to submit supplemental information, noting that going further into the review process without further information would require the board and commenters "to assess and respond to complex aspects of the proposed merger without the clarity and detail necessary to evaluate how the proposed merger aligns with the current regulatory framework.” That information will be due by July 2027.
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The merger seeks to create a new Union Pacific Transcontinental Railroad, which would span approximately 50,000 miles and connect around 100 U.S. ports on the East, West and Gulf Coasts. The idea has drawn interest from some shippers excited by the prospect of fewer delays, but concern from others about potential anticompetitive effects. Leaders of other major Class I railroads, including BNSF and CSX, are opposed to the merger.
The board in January rejected UP and NS’s first merger application after finding it lacked information necessary for the review to move forward. The companies submitted a revised application with additional information on May 6.
In its recent decision, the board denied a request from the two companies for ex parte communications, a legal term for allowing direct, confidential discussions with the board out of view of other parties or the public. The board will re-evaluate thie request if it identifies specific issues where that type of communication would be necessary, a press release says.
The proceedings are being held in abeyance until the companies submit their supplemental information, after which the STB will begin preparing an Environmental Impact Statement looking at potential environmental effects of the merger. This process will include at least 12 in-person public meetings and “several virtual meetings” on the proposed merger, according to a press release.
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