Union Pacific to buy Norfolk in $85B mega U.S. railroad deal | Hacker News Reader

Union Pacific to buy Norfolk in $85B mega U.S. railroad deal

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80 pointspseudolus95 comments

Shortening “Norfolk Southern” to “Norfolk” makes this confusing to read. Norfolk is a city (and former HQ of Norfolk Southern). “Union” isn’t shortened the same…

Also, railroads are already monopoly, it’s not like anyone can lay down new tracks, and operators aren’t required to allow 3rd parties on their networks…

Only confusing if you think it’s more likely that a railroad company is buying a town instead of another large railroad company…

They may be a monopoly in their regions but this would be the first time in a long while we had the same name coast to coast.

yes, railways don't buy towns, they build them from scratch!

Don't forget the famous Norfolk island, whose TLD is .nf: https://en.wikipedia.org/wiki/Norfolk_Island

The fastest Mandelbrot rendering algorithm, using a perturbation method, was developed by a guy from there.

Believe me, it's a lot more confusing to british people.

Used to be called Norfolk & Petersburg. Now it's two city names. Does that make it less confusing?

Under normal circumstances, a merger between railroad giants would be so outlandish that they would never consider publishing an announcement like this. Anything is possible these days, it seems.

No, why? Is it (much) more outlandish than the merger that created BNSF? Is it much more outlandish than CP and KCS? What makes this more outlandish than the previous mega-mergers?

Seems to be ~20x the value of the BNSF merger(~10x accounting for inflation). So yeah its pretty outlandish?

OK, but why does that make it "outlandish", as opposed to just "really big"?

It's smaller than Pfizer buying Warner-Lambert in 1999. It's smaller (at least inflation adjusted) than Exxon-Mobil or Citicorp-Travelers. It's a lot smaller than AOL-Time Warner in 2000. It's smaller than Dow-duPont in 2015.

Why is it outlandish? Because it involves railroads?

In short, "yes, because it's railroads". There's not much else that requires so much public resources (land) and capital; yet for that railroads deliver a broad capability (hyper thermodynamically efficient over land transport) that is not replicable via any other technology or practice. If we don't develop/improve that capability, we give up a tremendous amount of ability. If we let it consolidate and then atrophy, we regress to a huge degree.

It'd be like privatizing the roads and then allowing the closure of the small farm roads because they're "not profitable". It'd be massively short sighted and would cause problems for decades, maybe over a century as we sort things out and get back on track. It's what we're in the middle of with railroads.

A couple of nits: Land I might give you, but capital? I cited a bigger bank merger and a bigger telecommunications/broadcasting merger. Both of those involve enormous amounts of capital.

Second, railroads are more efficient at hauling stuff longer distances. They are not more efficient at local pick up and delivery, though. Letting trucks take over that part makes things more efficient, not less. Your "closure of small farm roads" analogy is therefore off base.

You yourself were comparing it to other rail mergers. Not in the context of any corporate mergers ever.

Both workforces are union and I doubt employees will see much benefit from this. I would expect to see the unions block this unless they get major concessions.

>I would expect to see the unions block this unless they get major concessions.

I can understand mergers being blocked by regulators, but what powers do unions have? What was the last time a merger was blocked by an union?

Possible never..

Nationalize the rails. Let companies compete on their rolling stock.

There are some good theoretical arguments for such a structure, but OTOH experience trying to apply it on railroads hasn't been exactly positive. UK probably being the prominent example.

Obviously it would be impossible in today's political climate, but I believe it would be a solvable problem.

Ensuring full utilization of Positive Train Control could allow a lot more traffic (including a lot more passenger rail, and make it a first class citizen of the rails) -- https://en.wikipedia.org/wiki/Positive_train_control

What happened to antitrust? We were making great progress and then a few months ago this admin totally flipped?

> The transaction faces numerous regulatory hurdles and will serve as a key test of the changed thinking around antitrust issues under President Donald Trump.

In other words, the companies have agreed to merge, but regulators will still have to approve.

Which they inevitably will. They’ve completely softened in the last few months. I think L*tnick has more power now?

We were making great progress under the previous administration until six months ago, yes.

Oh, no, you were not! The fact that it's way worse now, doesn't mean you had "great progress" before.

I think it's pretty much indisputable that the FTC was making huge progress in consumer rights and antitrust work. What, specifically, are you talking about in your comment. It's easy to make comments like this based on general 'feelings' without saying anything at all.

What great progress was made under the previous administration?

Among many others:

https://www.ftc.gov/news-events/news/press-releases/2024/09/...

https://www.ftc.gov/news-events/news/press-releases/2023/10/...

https://www.ftc.gov/news-events/news/press-releases/2022/06/...

https://www.reuters.com/world/us/us-ftc-accuses-intuit-decep...

https://www.ftc.gov/news-events/news/press-releases/2023/06/...

https://www.ftc.gov/news-events/news/press-releases/2022/08/...

FTC sues, FTC proposes, FTC accuses.

I see no actual change here.

None of those are antitrust, those are just examples of basic consumer complaints.

And barely that. If one of these is to be taken at face value, you don't need to disclose fees and false advertising is not illegal?

Lawsuits against Meta, Amazon, Google, Kroger, etc. They were actually starting to enforce antitrust laws. Tr*mp DOJ actually started the Google one.

None of those were split. They're still the same big monopoly/oligopoly companies. So there's nothing happening that could be considered as antitrust.

I think maybe Lina Khan was, but not the whole Biden administration.

The case for merger is that the the two lines don't really overlap, so it (arguably) won't decrease competition. Meanwhile a larger network would make things more efficient for shippers because goods can travel coast to coast without changing trains.

https://archive.is/65ihv

This is absurd and easily and trivially disputed.

Having a nationwide network absolutely lets you compete with networks that are more regional "If you want to use our western routes you have to use us in the east too."

> larger network would make things more efficient for shippers

LOL

> goods can travel coast to coast without changing trains

They already can.

>They already can.

I'm not a railroad expert, but here's the exact quote from the article, which cites a consultancy:

>Going from coast to coast is a greater prize. Avoiding interchanges between networks would mean faster trains and fewer delays. According to Oliver Wyman, a consultancy, the share of intermodal goods in America that travel by rail on journeys longer than 1,500 miles increases from 39% to 65% when served by a direct line. Transcontinental railways would mean fewer lengthy stops in Chicago and may make shorter routes near the Mississippi river more profitable.

Maybe Oliver Wyman is on the payroll of UP/Norfolk and this isn't true, but I'd like to see something more reputable than a HN comment of 1-3 word refutations.

"Interchange" means the train going from one company's tracks to another. It does not involve changing trains. It involves a phone call.

Additionally, it probably still wouldn't be possible for most origins and destinations from going coast to coast without interchange because will probably have to use shortline tracks at some point, like the Chicago Belt Railway.

This depends on the train lines and what trackage rights they have with the others. So it's not a given that one company will haul cargo from the west coast to the east coast. Interchanges will continue to be important since even within a specific train company the goods may have to be changed to a different train at least once.

This merger will actually make interchange harder because this coast-to-coast mega-railroad will probably start refusing interchange from the other Class Is.

Very hard to believe freight trains can't go coast to coast in the US and they get unloaded to load on a new train on the same gauge rail.

The loaded cars can go coast to coast, but trains are broken up and reorganized often in yards, especially in places like Chicago. this is efficient because two cars from LA headed to Toronto and NYC can travel together until Chicago and only then be split into two new trains. Even within a single railroad this is commonly done.

A train leaving Seattle isn't loaded entirely with cars going to Philadelphia. Some are going to Miami, some are going to Texas, some at going to Chicago. There might even be cars in Chicago that get picked up by that train on its way to Philadelphia.

Nobody is talking about taking boxes out of one car and putting them on another, but it seems pretty self-evident that the entire train itself would get broken up multiple times on a cross-country trip.

Disputed does not mean disproven.

There are reasonable people who think this merge would be good, and reasonable people who think it would be bad, and perhaps we can discuss pros and cons without acting like asses?

I agree.

So here is a map of who owns the railways so we can ascertain who would be affected by the merger.

https://stb.maps.arcgis.com/apps/mapviewer/index.html?webmap...

I think this is bad becasue it will kill CSX as their lines will be less used for cross country deliveries.

CSX already had ana anti-trust suite against Norfolk which was rejected during this administration.

https://www.freightwaves.com/news/supreme-court-wont-hear-cs...

CSX and BNSF will basically be forced to merge to have any hope of competing against the mega-UPNS

> There are reasonable people who think this merge would be good

No there aren't, unless you interpret "good" as "good for extracting monopoly prices from the people". The US economy is overly monopolized as it is even without this buyout.

More importantly, no reasonable person would skip the $85 Billion (with B) price tag which is a definite proof of my words above.

"People who disagree with me about a railway company merger cannot possibly be reasonable, and instead must be mustache-twirling villains" is certainly an interesting take. Good luck with that.

> "People who disagree with me about a railway company merger cannot possibly be reasonable,

So according to you, I somehow stated that disagreement with me makes somebody unreasonable, and in support of that you provided... a fictional quote. Your strawman isn't simply unreasonable, it's aggressively dishonest.

> "and instead must be mustache-twirling villains" is certainly an interesting take.

Now you offer hallucinations about "mustache-twirling villains"... Do you have something, anything, reasonable to say? Like address the topic? $85 Billion with a B? Did you forget about it?

Peaceful disagreement DOES NOT make an argument reasonable. Are you going to argue about that too?

> > There are reasonable people who think this merge would be good

> No there aren't

You did state that disagreement makes you unreasonable.

> You did state that disagreement makes you unreasonable.

No, I didn't, and there's no such claim in the words you so selectively quoted. Outside of that, I used the specific facts of the case to show that it's unreasonable to call the merge good.

>More importantly, no reasonable person would skip the $85 Billion (with B) price tag which is a definite proof of my words above.

Why is $85B automatically bad? Is it just because it's a large sum of money?

> Why is $85B automatically bad?

I didn't say automatically, I referred to "my words above" - that kind of money, and the profits on top of it, can only come from monopoly pricing and it's a strong sign that the business in question is operating in near monopoly conditions.

In most of the world, railroads (and other roads) are government owned because it's hard to make that kind of business competitive plus there are natsec issues to address. The privatization trend is recent.

> In most of the world, railroads (and other roads) are government owned because it's hard to make that kind of business competitive plus there are natsec issues to address. The privatization trend is recent.

In many parts of the world, railroads were originally private enterprises. The US is perhaps exceptional here in that they never nationalized theirs.

The same was said for Canadian Pacific and Kansas City Southern.

Edit: one problematic impact is drastically higher traffic along the single line joining the networks that runs through Dubuque, Iowa.

...and what? Did it pan out? Don't leave us hanging!

CP-KCS merger was approved in 2023. Created a single line connecting Canada, US and Mexico. So far we have seen streamlined operations, reduced transit times and improved reliability for cross-border freight. Some smaller shippers have reported concerns about rate increases and fewer service options, but it's been limited so far

Under Biden, FTC commissioner Lina Khan was returning the agency to enforcing anti-trust and anti-monopoly laws.

I think she correctly identified corporate consolidation, collusion and legally entrenched middlemen as a threat to the working class and economic competitiveness.

Her record wasn't 100% wins but I think she was setting the stage for a much more impactful 4 years had Biden or Harris won.

I think she was one of the reasons big tech and oligarchs fell into line for Trump. Now we're stuck with the most openly corrupt and transactional corporate administration in US history.

A good interview on her philosophy: https://www.nytimes.com/2025/06/19/opinion/lina-khan-monopol...

Can you really call it a new Gilded Age without railway barons?

My money says this will get regulatory approval to compete with the CPKC which goes both east-west and north-south from Canada to Mexico. In this climate a rail network from coast to coast entirely in the continental US is probably viewed as "national security".

I don't see CPKC as a reason for approving this. It won't compete with them in Canada or Mexico at all (since neither UP nor NS go there). And it won't compete much with them in the US, since CPKC pretty much just does north-south in the middle of the country.

I mean CPKC might be the excuse, but that's not the same thing...

What happened to antitrust is you guys had an antitrust system that was going way too far (think breaking up regional gas stations too far) and then nixon appointed Rehnquist to the supreme court in 1972, then Reagan appointed him chief justice in 1986. Rehnquist made decent arguments for reforming that that were then taken too far over his tenure (and continuing to this day) and now we have multinational oligopolies. Taking a good idea too far, making it an extremely bad idea is basically the theme of the pendulum swings of human history.

You guys?

How many people on HN do you think were around so that they could vote for Nixon in 1968?

Given demographics of HN they probably is British and talking to Americans

British North American sir! Aka Canadian.

I think that referred to Americans

It did, but I was so pleasantly surprised they were choosing to be offended due to incorrectly attributing my statement to ageist biases rather than racist biases that I was going to just let it slide. It was so nice to get some variety in the incorrectly offended miasma that is the modern internet....

I meant more recently. Lina Khan was making progress and even Tr*mp seemed to be taking a harder line on the tech companies in particular.

Yeah even chuds like Josh Hawley and Matthew Gates were pushing for anti trust

They were for breaking up primarily only the corps that they believe harm(ed) their political party and ambitions. Now the mega corps can just bribe them and/or partner with them and get rewarded with not just not getting broken apart but consolidating even more.

Any hard line taken by Trump is just a cudgel to extract concessions or bribes. Break up Big Tech [unless they follow my orders].

Khan was from Biden. Purged like everyone else.

Trump was just shaking them down. He was never going to actually fight money.

My personal take is you are mistaking progress with a shake down in progress. Lina is operating within the highly restrictive framework the supreme court put in place on Rhenquist and under that it is extremely difficult to break up anyone. it is, however, possible to be enough of a pain for a company that they elect to pay you off in some manner (i.e. campaign contribution, cushy job upon leaving government, outright bribe,etc). Everybody knows an at&t style breakup isn't going to happen when that is what is really needed for most of these oligopolies and they are playing it in a rent seeking manner.

Don't forget Bork! Rehnquist was ready for the message, but Bork wrote the book and made the argument.

Regan really is the beginning of all of this.

Money. Too big to fail; too big to resist.

It's hard to say if this would be approved even under a normal administration. If UP and NS get to merge, I would expect BNSF and CSX to try and do the same, leaving just two national train companies. But there are still hundreds of Class II and Class III railroads operating in the US, so as long as there are concessions made to ensure long-term trackage rights, it would not necessarily be rejected out of hand.

This would have went through under either an R or D administration. Union Pacific gave 2x more to all politicians than CSX.

https://www.opensecrets.org/orgs/union-pacific-corp/summary?...

https://www.opensecrets.org/orgs/csx-corp/summary?id=D000000...

Yes they flipped. Lina Khan should have supported mergers for smaller companies (to help startups needing an exit) while breaking up the largest and most abusive companies like Google or Amazon or Microsoft. Unfortunately now more will come. Warren Buffett is more likely to pursue his own rail merger for BNSF (owned by Berkshire Hathaway):

https://www.semafor.com/article/07/21/2025/berkshire-bnsf-ba...

Could you explain why you think any "startup" "needs an exit"? Why should we accept businesses that cannot persist on their own?

This comment caught me off guard with how blatantly VC-sycophantic it is.

> Could you explain why you think any "startup" "needs an exit"?

Because it is, and always has been, profit over product (and people).

But how can the product exist if people don’t make enough profit? Why would they take on the risk and stress of building a business instead of just taking another job.

It’s very hard for companies to go public these days. There isn’t a willingness for institutions or people to invest in companies that haven’t made it yet. Think about how small companies like Microsoft or Google or Amazon were when they went public. Then think about giant private companies like Stripe or Figma. Now you have to be much larger and more mature, which takes a long time.

For employees it means waiting 15-20 years for a payday. How many people can take such a big risk, going half their career underpaid waiting for their options to become something? Companies are meanwhile forced to raise capital that isn’t from the public stock exchanges and that can also go on only for so long. Meanwhile you have these giant companies like Google or whatever who can just copy your great idea/business and throw money or people at it, eventually killing you before you get to exit. Look at how Microsoft abused their Office sales contracts to give away Teams to kill Slack. Eventually that forced Slack to sell to Salesforce.

I guess I view it as chicken and egg. If the huge mega corp companies were broken up or heavily regulated maybe smaller companies wouldn’t need mergers and acquisitions as much because they would be more stable in a fair competitive environment.

But I’m not an expert in any of this. I’ve just seen others talk about all this when lurking on this website.

>For employees it means waiting 15-20 years for a payday.

But why do they deserve a payday? If the public markets aren't willing to buy in to IPOs at the given IPO sale price, then perhaps the company isn't valued at the funding rounds valuations that only come from a small handful of investors?

Exit time has doubled in VC. It is a major problem. Hundreds or thousands of people at a single company might be taking lower salaries in exchange for equity that is unsellable until it goes public (or steeply discounted). Yes sometimes valuations are way too high in private markets but an IPO enables a reset and liquidity.

Saying people don’t deserve an exit is saying startups shouldn’t even exist? At some point every company provides liquidity whether it’s stock sales, dividends, merger, etc.

> Then think about giant private companies like Stripe or Figma. Now you have to be much larger and more mature, which takes a long time.

I don't think this is accurate.

People are chomping at the bit to invest into private companies through Tokens on Robinhood. Private companies do not want to deal with accountability so they remain private.

> I guess I view it as chicken and egg. If the huge mega corp companies were broken up or heavily regulated maybe smaller companies wouldn’t need mergers and acquisitions as much because they would be more stable in a fair competitive environment.

If you didn't allow small companies like Skype to sell to Microsoft then there wouldn't be a Teams to bully Salesforce.

Only the top 30 companies have secondary interest. Everyone else is illiquid or takes a steep discount. It’s not healthy for the early stage ecosystem which relies on capital recycling to fund the next generation of managers and founders.

Is it because going public is harder (probably true) or because nowadays, hot companies can more easily raise money without going public?

It seems like companies that are getting similar levels of hype to what Netscape and Google did could go public, but don’t want to, or not yet, anyway. I find it hard to believe that Anthropic or Stripe wouldn’t have successful IPO’s.

Both. It’s more expensive to go public and the market (institutions) is only interested in mega deals because they have so much capital to put to work. Large funds can give a company 100s of millions which enables them to stay private longer and not deal with public disclosures etc.

Ok but even ignoring her this admin totally flipped? Tr*mp was taking a much harder line and now he’s letting everything through?

If you thought Trump believed in anything beyond whatever is good for Trump right now you fell for the con.

This is patently illegal but the current administration doesnt care about that.

But don't they dare repair and replace tracks, signals, and cars..but, no.

US rail currently operates with shocking rates of derailment causing toxic releases and critically strained labor relations. There is business potential in this deal, but also a strong likelihood of continued disintegration.

If they get the Electric Company and Water Works it's likely bankruptcy for us. Put more houses on Oriental Avenue and hope they land there next turn.

Cool, more railroad monopolies, yay.

What century are we in?

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