Rails’ Best Shot at Growth Is a Mega-Merger: Industrial Strength

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The revival of deal talks to create the first true transcontinental US railroad suggests another dream of the industry is fizzling out: fundamental growth.

Union Pacific Corp. on Thursday confirmed it’s in advanced talks to combine with Norfolk Southern Corp., a deal that would create a company with nearly $40 billion of revenue and a rail network spanning San Francisco to New York City. It would be the capstone to decades of consolidation in the rail industry, most recently through Canadian Pacific Railway Ltd.’s $30 billion takeover of Kansas City Southern to create ...