CSX Corp.’s stock rose to its highest level of the year July 17 after a report that Union Pacific Corp. is seeking to buy one of the two major eastern railroads, CSX or Norfolk Southern Corp.
Omaha, Nebraska-based Union Pacific operates in 23 western states and a merger with an Eastern railroad would give it a coast-to-coast rail network.
The report from news site Semafor said Union Pacific is working with investment bankers at Morgan Stanley to explore a deal.
Semafor said it did not know the target but said Union Pacific CEO Jim Vena has publicly commented about the possibilities of a transcontinental railroad.
Jacksonville-based CSX, Atlanta-based Norfolk Southern and Union Pacific are three of the six major Class I freight railroad companies in North America. The other three are BNSF Railway, Canadian National Railway and Canadian Pacific Kansas City.
Mergers involving any of those six would receive intense regulatory scrutiny from the U.S. Surface Transportation Board.
However, speculation about mergers has risen this year on sentiment that the Trump administration will be amenable to a large railroad combination.
A CSX spokeswoman said by email the company had no comment on the report.
CSX’s stock rose as much as $1.53 to $34.79 in early trading July 17 after the report, its highest level since December.
Norfolk Southern rose as much as $8.14 to $268.46
Union Pacific opened $3.68 lower at $227.50.