White House · Donald Trump · Intel · Fortune Technology
Trump floated the idea of a 15% government stake in a large railroad merger
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◎ Multiple-sources
President Donald Trump recently expressed interest in the federal government acquiring a 15% stake in a massive railroad merger, remarks that took on new resonance this week when a federal regulator put the $71.5 billion merger of Union Pacific and Norfolk Southern on pause for additional review.
Key facts
- In January, the STB rejected the initial application for Omaha-based Union Pacific’s $85 billion acquisition, including debt, of Atlanta-based Norfolk Southern in a cash-and-stock deal
- Union Pacific CEO Vena expressed confidence, in a prepared statement on May 28, that the deal will still be approved by mid-2027 as planned
- A fifth U.S. railroad was consolidated out of the market three years ago when Kansas City Southern was acquired by Canadian Pacific Railway for $27 billion, after the smaller Canadian Pacific won
- On May 28, the STB accepted the revised application, which formally allows the deal to continue the acquisition process
Summary
At the same time, Trump’s second term has been marked by unprecedented federal investments in publicly traded companies —from Intel to rare earths miners and refiners —all in industries deemed critical for national security. The proposed deal, which would be the biggest railroad merger ever, has inspired both political and industry opposition, driven by fears that the expanded Union Pacific Transcontinental Railroad, as the new company would be called, would consolidate monopoly power in freight shipping and lead to higher prices for consumers and fewer railroad jobs.
David Vernon, senior transportation analyst for Bernstein, said the government successfully negotiating a federal stake as part of the merger process is “probably not going to happen.”