CN backs Union Pacific’s Norfolk Southern bid as STB review continues

Canadian National agreed on July 22, 2026, not to oppose Union Pacific’s proposed $85 billion acquisition of Norfolk Southern, giving the transaction a significant new supporter while leaving federal review unresolved.

The agreement is contingent on approval by the Surface Transportation Board and completion of the merger. The STB has not approved the deal. Instead, the agency is holding the proceeding in abeyance while it seeks additional information from the applicants.

What CN would receive

Under the binding memorandum of understanding, CN would receive access to certain facilities where the merger could reduce railroad choices from two to one or from three to two. The agreement also provides for CN ownership interests in the Kansas City Terminal Railway and the Terminal Railroad Association of St. Louis.

CN would gain additional Midwest operating rights between Tuscola, Illinois, and East St. Louis, Illinois, as well as customer rights between St. Louis, Missouri, and Kansas City, Missouri. The agreement also includes use of Union Pacific’s Neff Yard in Kansas City.

Those provisions are intended to preserve or expand access for some shippers, but they do not automatically guarantee lower freight rates, better service or broader competition.

Why the proposed merger matters

Union Pacific’s proposed purchase of Norfolk Southern would combine two major freight railroads and create what the Associated Press described as the first U.S. transcontinental railroad. AP reported that the proposed company could account for more than 40% of U.S. rail traffic and reduce the number of major U.S. freight railroads to five. That is a projection or characterization of the proposed combination, not a final market outcome.

The scale of the transaction is central to the regulatory debate. Railroads, shippers, employees and communities could be affected by changes in routes, terminals, car supply, service levels, employment and the bargaining position of customers that depend on freight rail.

CN’s agreement strengthens Union Pacific’s position, but it is not industry-wide support. BNSF and Canadian Pacific Kansas City oppose the transaction, while CSX has raised concerns about its effect on competition.

What regulators are still examining

The STB accepted a revised Union Pacific-Norfolk Southern application for consideration on May 28, 2026. That was a procedural decision about whether the revised filing was complete enough for consideration; it was not a decision that the merger serves the public interest.

The agency then placed the proceeding, including environmental review, in abeyance and required supplemental information. Its requests cover enhanced competition, access for two-to-one and three-to-two shippers, public-benefit calculations, service assurances, gateways and car supply, market-share projections, downstream effects, passenger rail and supporting workpapers.

The STB’s merger resources page lists a supplemental response and redesignated employee-impact exhibits filed on July 27, 2026. The agency has not yet established the next procedural schedule.

What happens next

For shippers, the immediate issue is not a change in rail service but the terms and evidence that will shape the federal review. The proposed access and terminal arrangements could affect some customers and competing railroads if the merger is approved, while the broader effects on rates, reliability, jobs and supply chains remain uncertain.

The next major milestone is a future STB decision setting the remaining review schedule. Until the agency issues a final approval and the companies complete closing requirements, Union Pacific and Norfolk Southern remain separate companies.

Sources

• Surface Transportation Board merger docket
• Canadian National-Union Pacific agreement
• Associated Press coverage