$200 billion "World Merger" - The largest deal in the history of the American railway industry is about to be completed

The American railway industry may soon witness a significant merger, as Union Pacific is set to acquire Norfolk Southern, creating a new giant in U.S. rail transportation.

On Sunday, media reports citing multiple informed sources revealed that Union Pacific Corporation is close to reaching an agreement to acquire its rival Norfolk Southern Corporation, which would create a railway transportation giant spanning the United States, with a valuation potentially exceeding $200 billion.

Sources indicated that the boards of directors of both companies are expected to hold meetings over the weekend, with an announcement of the deal possibly as early as next Monday. They noted that while negotiations have entered the final stages, there could still be obstacles or even a breakdown.

This transaction would become one of the largest mergers in the U.S. railway industry in recent decades, triggering a restructuring of the railway transportation market. However, the deal will face stringent scrutiny from regulatory agencies.

It is worth mentioning that Union Pacific Railroad's stock price has fallen 2.8% since July 16 (the day before media first reported on the merger talks), with a market capitalization of approximately $133 billion. During the same period, Norfolk Southern Railway's stock price has risen about 8.5%, with a market capitalization nearing $64 billion.

A Strong Alliance of Railway Giants

If the deal is successful, it would be the most significant merger in the railway industry since Warren Buffett's Berkshire Hathaway acquired Burlington Northern Santa Fe Railway (BNSF) for about $26 billion in 2010. The combination of Union Pacific and Norfolk Southern would create a railway network connecting the East and West Coasts of the United States, enhancing competitiveness with the trucking industry.

Union Pacific is one of the largest railway operators in the western United States, with over 32,000 miles of railway network spanning the western and midwestern regions. Norfolk Southern primarily operates railways in the eastern and southeastern United States, with approximately 19,000 miles of track.

This merger would fundamentally change the North American railway market, integrating Union Pacific's extensive railway network in the western United States with Norfolk Southern's East Coast lines, putting immense pressure on competitors, including CSX Corporation and Berkshire Hathaway's BNSF Railway, forcing them to pursue mergers to keep pace.

The biggest challenge facing this transaction comes from regulatory aspects. The Surface Transportation Board of the United States must approve any railway merger, and the agency has historically taken a cautious approach to consolidation in the railway industry