Norfolk Southern Stock Rises In Extended Trading After Report Flags Railroad Operator As Bigger Rival Union Pacific’s Buyout Target

Norfolk Southern (NSC) stock gained 4.7% in extended trading on Thursday after a report said that Union Pacific is holding talks with the company over a possible buyout.

The after-hours surge came after the 3.7% rally in Thursday’s regular session, inspired by a Semafor report that said the Omaha, Nebraska-based Union Pacific was considering acquiring a rival on the U.S. East Coast, but did not specify a name. Union Pacific also rose marginally in after-hours trade.

The Wall Street Journal reported, citing people familiar with the matter, that the talks are at an early stage and there are no guarantees that a deal will be agreed or if it will receive regulatory approval. A rival bidder might also emerge, the report added.

Separately, BofA Global Research had raised the price target of Norfolk Southern stock to $305 from $290. Retail sentiment for the stock was in the ‘bullish’ territory, and traders were ‘extremely bullish’ about Union Pacific.

While Trump’s White House has been friendlier to large mergers compared to the previous Biden administration, the sheer size of the company, as well as the involvement of unions, will likely raise questions about the future of the potential deal. 

The current chairman of the Surface Transportation Board, which oversees freight railroads, Patrick Fuchs, has stated that he plans to expedite the rulings on disputes and other legal decisions.

Union Pacific CEO Jim Vela has spoken about the benefits of a transcontinental railroad in the past, as it will help freight companies avoid current delays when transferring railcars between different railroad operators at interchanges.

The Semafor report noted that if Union Pacific can strike a deal, it could argue to regulators that a coast-to-coast railroad would better compete against the trucking industry, which still handles more than 70% of domestic freight.

Norfolk Southern is currently valued at about $61 billion, while Union Pacific has a market valuation of $134 billion. Any deal between the two companies will be this year’s largest, following Trump's tariff war, which led to companies avoiding big-scale acquisitions.

Norfolk Southern stock has gained over 13% this year, as of Thursday’s close. The company has had its fair share of controversies in the recent past, with CEO Alan Shaw abruptly leaving the company after a board investigation into a relationship with an employee, late last year.

Activist investor Ancora Holdings had also campaigned for changes at the company after criticizing its operational and financial performance, as well as its handling of the 2023 train derailment in Ohio.

Also See: US Treasury Secretary Scott Bessent Visits Japan But Skips Tariff Talks As Trump’s Aug. 1 Deadline Looms

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