President Donald Trump has floated the idea of the federal government acquiring a 15% stake in a pending massive railroad merger, a proposal that comes as regulators pause the $71.5 billion Union Pacific-Norfolk Southern deal for further review. The U.S. Surface Transportation Board (STB) announced the delay on May 28, citing the need for additional scrutiny of the proposed merger, which would create the largest railroad company in U.S. history.
Trump's Unprecedented Federal Investments
Trump’s comments, made during a May 12 interview with Fortune, align with his administration’s broader strategy of unprecedented federal investments in industries deemed critical to national security. While Trump did not specify which railroad merger he was referencing, the Union Pacific-Norfolk Southern deal is the only known major railroad merger currently pending.
"I got another one coming, a railroad," Trump told Fortune. "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 proposed merger has faced opposition from both political and industry groups, who argue that it could consolidate monopoly power in freight shipping, leading to higher consumer prices and job losses in the railroad sector.
Unlikely Federal Stake
David Vernon, senior transportation analyst for Bernstein, cast doubt on the likelihood of the federal government successfully negotiating a stake as part of the merger process. "It would depend a lot on what the terms are," Vernon said, acknowledging that some arrangements could be made for specific growth initiatives that enhance U.S. economic security.
Neither the White House nor the STB responded to requests for comment on the potential government ownership stake. Union Pacific and Norfolk Southern also declined to comment.
The merger’s future remains uncertain as regulators and stakeholders weigh its economic and national security implications.