WASHINGTON — Top legal officials in seven Republican states are asking the U.S. Department of Justice to scrutinize the proposed Union Pacific-Norfolk Southern merger.
The group of state attorneys general led by Montana’s Austin Knudsen claim that the east-west consolidation will stifle competition and increase costs for Americans.
The coalition in a letter asks Acting Assistant Attorney General Omeed Assefi to review the proposed merger to provide additional analysis as the Surface Transportation Board evaluates the transaction. The STB has the sole authority to approve or reject the $85 billion deal, but the Justice Department’s Antitrust Division weighs in on rail mergers in filings with the railroad regulator.
Union Pacific plans to file an updated merger application with the STB on April 30.
A preliminary review by the attorneys general found the companies have failed to adequately address the clear loss of horizontal competition, raising antitrust concerns, the AGs said in a press release.
“By entrenching a single rail behemoth across key east-west corridors, the deal would shackle domestic manufacturers, energy producers, and farmers with higher rates and fewer shipping options, thereby blunting their competitive edge against foreign rivals, squeezing household budgets, and weakening the supply chains that underpin our national security,” Knudsen wrote in the letter. “Accordingly, we encourage the Department of Justice Antitrust Division to carefully scrutinize the merger, applying the existing law and merger guidelines to support the Surface Transportation Board’s review of the transaction.”
The coalition said the merger — which, if approved, would shrink the number of big U.S. Class I railroads from four to three — “could reduce shipping options by limiting cooperation with other railroads for interline services, which raises questions of whether the railroad companies’ commitment to keeping connection points open for freight and railcars is truthful, given it is not enforceable.
“Although Union Pacific claims the merger will result in increased growth and efficiency, the attorneys general also highlighted the importance of DOJ’s review of the deal considering the company’s nearly decade-long decline in rail service.”
Along with Knudsen, the letter was signed by attorney generals from Iowa, Kansas, Mississippi, North Dakota, South Dakota, and Tennessee. It comes just days after Assistant Attorney General and antitrust specialist Gail Slater was reportedly forced out of her position.
— A version of this article originally appeared at FreightWaves.com. To report news or errors, contact trainsnewswire@firecrown.com.
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