Lutnick Says Rail Mergers Could Improve Freight Flow
Union Pacific-Norfolk Southern Deal Faces STB Scrutiny
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Commerce Secretary Howard Lutnick said he鈥檇 support consolidation as a means to make the U.S. freight rail industry more efficient, a potential boost for Union Pacific Corp.鈥檚 takeover of Norfolk Southern Corp.
The rail industry鈥檚 current system of interchanges in the middle of the country creates bottlenecks that should be alleviated, Lutnick said in a CNBC interview on Aug. 19.
鈥淲hether that should be through a merger or in any other way, I鈥檒l leave that to the regulators and the overseers,鈥 Lutnick said. 鈥淏ut the concept of making it more efficient to get across the country is obviously something that we applaud.鈥
Union Pacific last month announced an agreement to purchase Norfolk Southern for about $72 billion in cash and stock. Combining Union Pacific鈥檚 network in Western states with Norfolk Southern鈥檚 East Coast tracks would create the first continuous transcontinental U.S. railroad, a tie-up the companies have said will enhance competition with the trucking industry and Canadian railroads.
(CNBC Television via YouTube)
The agreement is now set to be reviewed by the Surface Transportation Board, the rail agency鈥檚 economic regulator. U.S. rules require rail mergers to show that a deal would serve the public interest and enhance competition, a step beyond merger requirements applied to other industries. The companies aim to complete the deal by early 2027.听
RELATED:听Union Pacific-Norfolk Southern Merger Could Start Rail Trend
Lutnick said the review process wasn鈥檛 鈥渕y place to weigh in鈥 and would let the agency and other parties do so themselves.
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