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UP-CN Deal Includes Supporting NS Merger

[ July 24, 2026   //   ]

Union Pacific and Canadian National Railway have reached a binding agreement that would expand CN’s access to key U.S. Midwest markets while removing the Canadian carrier’s opposition to Union Pacific’s proposed acquisition of Norfolk Southern.

The memorandum of understanding establishes a framework for preserving rail competition following the proposed merger, which remains subject to approval by the U.S. Surface Transportation Board (STB).

Under the agreement, CN would gain competitive access to shipper facilities where rail options would otherwise be reduced by the merger, provided such access is commercially and operationally feasible. CN would also acquire Norfolk Southern’s ownership interests in the Kansas City Terminal Railway Co. and the Terminal Railroad Association of St. Louis.

The agreement would further expand CN’s Midwest network through new overhead operating rights between Tuscola and East St. Louis, Illinois, along with rights to serve customers between St. Louis and Kansas City. CN would also gain access to Union Pacific’s Neff Yard in Kansas City, giving the railway its first operational footprint in one of North America’s most important freight rail hubs.

In exchange, CN agreed not to oppose the proposed Union Pacific-Norfolk Southern merger during the STB review process. The two railroads said they will work together to support regulatory approval of both the merger and the settlement agreement.

“From day one, we’ve said our merger with Norfolk Southern will preserve and enhance competitive options and create a stronger railroad industry that delivers better service for customers,” Union Pacific CEO Jim Vena said in a statement. “This settlement agreement reinforces those commitments by giving expanded access and operating rights to a tough competitor.”

CN President and CEO Tracy Robinson said the framework is designed to preserve customer choice while positioning the railway to expand service across North America.

“As the rail industry considers significant structural change, it is essential that customers continue to benefit from meaningful competition and choice,” Robinson said. “This framework would preserve competitive access to key markets, including Kansas City, while positioning CN to continue providing reliable and efficient options for customers across North America.”

BNSF Railway, however, disputed Union Pacific’s contention that the agreement demonstrates the merger would enhance competition.

“Yesterday’s announcement does nothing to change the fact that this merger doesn’t enhance competition and would leave thousands of rail customers with fewer competitive options and a single railroad controlling roughly 50 percent of the market,” BNSF spokesperson Zak Andersen, chief of staff and vice president of communications, said in a statement.

BNSF also argued the agreement undercuts one of Union Pacific’s principal arguments in favor of the merger.

“For a year, UP has claimed that partnerships cannot deliver the benefits it says this transaction would create,” Andersen said. “Yet the CN agreement closely resembles partnerships that BNSF and other Class I railroads have successfully operated for decades.”

According to BNSF, the agreement demonstrates that many of the competitive benefits cited by Union Pacific can be achieved through commercial arrangements without requiring a merger. The railroad also noted that portions of the CN agreement are not contingent on STB approval of the proposed transaction.

The proposed Union Pacific-Norfolk Southern merger remains under review by the Surface Transportation Board. Competitive access, gateway protections and the transaction’s public benefits are expected to be among the central issues considered by regulators as they evaluate what would become the nation’s first transcontinental freight railroad.

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