Union Pacific CEO Jim Vena said he’s not interested in the federal government acquiring a stake in UP’s massive, $71.5 billion acquisition of Norfolk Southern—after President Trump expressed his interest to Fortune in owning a part of what could be the largest railroad merger—but Vena also didn’t definitively shut down the possibility.
Speaking to CNBC on Thursday, Vena said he’s complimented by Trump’s interest, but that Union Pacific doesn’t need any such federal support. Trump in May told Fortune that he wants a 15% federal stake in the large railroad merger—although he didn’t specifically name UP—comments that came just days before a federal regulator put the mega deal on pause for additional review.
“We’re a company that can afford to make this deal,” Vena said. “We’re a company that can afford to handle what the price is for this deal, and we do not need anybody’s help to do this.”
“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,’” Vena added. “Listen, I have not had any direct communication with the president of the United States to talk about the president and the government specifically coming in and being a partner in this.”
While Vena made it clear he considers federal intervention unnecessary, his remarks left open the potential to negotiate if the Trump administration presses the topic, possibly wanting to avoid antagonizing the president for now.
After all, industry analysts have said this is a deal so large in an already consolidated industry (there are only four major railroads headquartered in the U.S.) that it likely would not have been proposed under any other recent presidential administration.
There is no clear connection between the president’s comments, made in a conversation with Fortune last month, and the delay, announced by the regulatory body, the U.S. Surface Transportation Board (STB), on May 28. A pause is not unexpected for such a huge acquisition.
At the same time, Trump’s second term has been marked by unprecedented federal investments in publicly traded companies—from Intel to rare earths miners and refiners—all in industries deemed critical for national security.
The proposed deal, which would be the biggest railroad merger ever, has inspired both political and industry opposition, driven by fears that the expanded Union Pacific Transcontinental Railroad, as the new company would be called, would consolidate monopoly power in freight shipping and lead to higher prices for consumers and fewer railroad jobs.
During a sit-down interview with Fortune on May 12, Trump said that he wanted the government to gain an ownership stake in a pending railroad merger.
“I got another one coming, a railroad,” Trump said, of a deal that was currently in the works. “They want to expand. They want to merge, very big railroad, they want to merge. And I say, ‘Well, I want 15% of the railroad if you’re going to merge.’”
The companies declined, Trump told Fortune editor-in-chief Alyson Shontell, but he argued they will reconsider. “So they said ‘No,’ but they’ll say ‘Yes.’”
Trump then continued discussing his unique dealmaking record in his second term. “I make one of those deals every day that no normal person would make,” he said. “They actually say, ‘It’s very un-American.’ I said, ‘No, actually it’s very American.’” Such moves are part of a broader strategy of growing federal revenue and assets without raising income taxes that Trump and Secretary of Commerce Howard Lutnick have been pursuing.
Like many large companies, Union Pacific is a corporate donor to Trump’s ballroom project at the White House. UP also recently unveiled a commemorative locomotive for the nation’s 250th anniversary. The locomotive is No. 4547, representing Trump’s status as the 45th and 47th U.S. president. Union Pacific has denied any connections between those actions and the pending acquisition. Last year, Trump spoke highly of UP and Vena.
What comes next
The Union Pacific-Norfolk Southern merger, which was first proposed last summer, is not facing an antitrust review under the purview of the Federal Trade Commission, as would be the case with most industries. Congress specifically exempted the freight railroad industry from FTC review, designating it to be regulated by the more specialized STB. While the FTC analyzes whether a merger lessens competition, the STB uses a broader “public interest” standard regulating “common carriers” in a concentrated but critically important industry.
In January, the STB rejected the initial application for Omaha-based Union Pacific’s $85 billion acquisition, including debt, of Atlanta-based Norfolk Southern in a cash-and-stock deal. The regulator said the application was incomplete and required a more thorough analysis on railroad congestion, the potential impact on commodities transported, pricing, and other factors.
On May 28, the STB accepted the revised application, which formally allows the deal to continue the acquisition process. But it also said that even more review is needed, triggering the temporary pause.
The STB said: “There are several aspects of the revised application that are unclear or underdeveloped and require supplementation at this stage of the proceeding so that the board may have the information necessary to thoroughly evaluate—and the public has an adequate opportunity to comment on—whether the transaction is in the public interest.”
“In a future decision, the board will establish an appropriate procedural schedule for the remainder of the proceeding,” the STB added.
The little-known STB has had only three board members of late. Trump appointed two of them—chairman Patrick Fuchs and Michelle Schultz. The third, Karen Hedlund, served in the Obama administration and was appointed by former President Biden. A fourth, Republican Richard Kloster, was just confirmed by the Senate and is set to join the board.
The federal government hasn’t owned any freight railroads since the 1920s, with the exception of the Alaska Railroad, now owned by that state. The government does hold majority ownership of the passenger rail Amtrak network.
The merger would create by far the largest railroad on the continent, with a combined enterprise value of $250 billion, 50,000 miles of rail across 43 states, and connections to roughly 100 ports and to “nearly every corner of North America.” Vena contends the merger would create a stronger alternative to long-haul trucking, removing more than 2 million truckloads from roads annually.
Apart from several politicians publicly opposed to the consolidation, the Stop the Rail Merger Coalition, formed in late April, is also fighting the deal. Its members include Union Pacific’s arch rival BNSF, Canadian Pacific Kansas City railroad, employee unions for both Union Pacific and Norfolk Southern, the Teamsters, and industry lobbying groups for the petrochemical and agriculture sectors.
