STB Pauses $71.5B Union Pacific-Norfolk Southern Merger for Further Review After Trump Pushes for 15% Federal Stake
Jim Vena told CNBC the railroad can fund its $71.5 billion acquisition without government help. President Trump had said in May he wanted a 15 percent federal ownership interest in a large rail merger.
FortuneUnion Pacific CEO Jim Vena said he has not had any direct conversations with President Trump about the government acquiring a 15 percent stake in the pending acquisition of Norfolk Southern. Speaking to CNBC on Thursday, Vena said Union Pacific does not need federal support. “We’re a company that can afford to make this deal,” Vena said.
Vena added that he finds it comforting that the president viewed the transaction favorably. “I find it comforting that the president of the United States looked at what we’re doing and says, ‘Son of a gun, this is a good business, a good business move, strong, and I’d like to invest,’” he said.
President Trump told Fortune in May that he wants a 15 percent federal stake in a large railroad merger.
U.S. Surface Transportation Board placed the transaction on pause for additional review. 5 billion acquisition of Norfolk Southern by Union Pacific was first proposed last summer.
In January the STB rejected the initial $85 billion application, including debt, saying it was incomplete and required more analysis on congestion, commodity impacts, pricing and other factors. On May 28 the STB accepted a revised application but stated several aspects remain unclear or underdeveloped and require further supplementation.
The board said it will set a procedural schedule in a future decision.
The merger would create the Union Pacific Transcontinental Railroad with a combined enterprise value of $250 billion, 50,000 miles of track across 43 states and connections to roughly 100 ports. Vena contends the combined network would remove more than 2 million truckloads from roads each year.
The federal government has not owned freight railroads since the 1920s except for the Alaska Railroad, now owned by that state, though it holds majority ownership of passenger carrier Amtrak.
There are only four major railroads headquartered in the United States. The STB has had three board members. Trump appointed chairman Patrick Fuchs and Michelle Schultz. Karen Hedlund was appointed by former President Biden.
Republican Richard Kloster was recently confirmed by the Senate and is set to join the board. S. president.
The company is also a corporate donor to Trump’s ballroom project at the White House.
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