Union Pacific bid for Norfolk Southern rejected

The U.S. Surface Transportation Board has rejected Union Pacific’s application to acquire control of Norfolk Southern, ruling the filing was incomplete and failed to meet federal regulatory requirements.

In a decision dated Jan. 16, the board said the application lacked required market-share projections and did not include the full merger agreement and related documents outlining the companies’ obligations. Under federal law, the board must reject incomplete applications.

The decision halts Union Pacific Corporation’s proposed acquisition of Norfolk Southern Corporation and its rail subsidiaries, including Norfolk Southern Railway, as well as the planned consolidation of the two railroads’ operations.

Canadian railway CN applauded the decision.

“Today the Surface Transportation Board rightly rejected the UP–NS merger application as incomplete,” CN said in a statement. “UP and NS failed to meet the basic requirements when it came to providing all the necessary information in their initial filing. Simply put this application is missing the last mile. This decision reinforces that a merger of this scale cannot be assessed on omissions or partial disclosure and must be evaluated on a full and transparent record, as required by the heightened standards under the new merger rules.

“A stronger record will allow the board to determine whether the proposed transaction is in the public-interest and whether the time and scope limited measures offered by the applicants satisfy the requirement to enhance competition. As noted earlier, applicants had refused information critical to understand their perspective on anticipated competitive harms and inform the board’s public-interest and competition analyses. The board rightly found that applicants needed to provide that information. CN looks forward to participating robustly once UP-NS have submitted a complete application and encourages customers to file their notices of intent to participate so they can stay informed and continue to participate in the STB’s process.”

The board also rejected two related applications involving the Peoria and Pekin Union Railway and the Terminal Railroad Association of St. Louis. It said the St. Louis transaction had been incorrectly classified as “minor” and should instead be treated as a “significant” transaction, while the Peoria and Pekin filing was deemed incidental to the main deal.

The rejection was issued without prejudice, meaning the companies may refile revised applications addressing the deficiencies. The board directed the applicants to indicate by Feb. 17 whether and when they intend to resubmit.