STB finds rail merger application incomplete
The Surface Transportation Board is sending Union Pacific’s proposed $85 billion merger with Norfolk Southern back to the drawing board.
On Jan. 16, the STB rejected the UP’s 6,700-page application without prejudice, meaning it can be refiled with additional required information. The parties have until Feb. 17 to submit a letter detailing how and when they will submit required information.
The STB ruled the December application incomplete, citing missing projections of market share and impacts on competition.
“In the application, Applicants project that the merger will result in traffic growth, including diversions, and state that the full impacts of the transaction will not be realized until three years post-consummation. However, Applicants present as the projected market shares only the sum of actual 2023 UP and NS estimated market shares. The application does not contain future market share projections showing the combined effects of merger-related growth, diversions, and merger-influenced and other changes to market conditions that Applicants anticipate. Today’s decision finds that Applicants’ market impact analyses must necessarily project market shares beyond the transaction’s consummation date, and therefore that the application does not include the ‘projected market shares’ as required. These market-share projections are necessary because ‘(a)ny railroad combination,’ including an end-to-end combination, ‘entails a risk that the merged carrier would acquire and exploit increased market power.’ ”
“We applaud the STB’s decision to reject the UP/NS merger application based on the application lacking core information critical to determining the proposed merger’s impact on competition,” said Zak Andersen, BNSF’s chief of staff and vice president of communications. “We also appreciate the STB’s willingness to consider the views of all stakeholders as part of the regulatory review process.”
BNSF was among several other railroads pointing out the incompleteness of the application in public comments to the STB. Two rail unions, the Brotherhood of Locomotive Engineers and Trainmen and the Brotherhood of Maintenance of Way Employees Division, withdrew their tentative initial support for the merger, saying their members worried the deal would increase safety risks, cause service disruptions and increase costs.
The National Grain and Feed Association was the only shipper association to file comments with STB about the completeness of the filing. NGFA applauded STB’s decision to reject the filing as incomplete, saying, it” looks forward to continued engagement with the STB and Union Pacific to ensure any submission addresses these concerns and delivers tangible benefits for rail customers and the agricultural supply chain.”
The American Chemistry Council said it commended STB’s decision.
The three areas STB cited as to why they rejected the application was market-share data, lack of a full merger agreement and the Terminal Railroad Association of St. Louis transaction.
UP/NS will be permitted to file a revised application prior to June 22, 2026
David Murray can be reached at [email protected]. Ken Eriksen also contributed to this story.
