With Union Pacific and Norfolk Southern now in advanced talks to merge, attention has quickly shifted to CSX, another major U.S. railway company. Investors and industry watchers are now wondering whether CSX could be next in line for a merger, and if so, with whom?
There’s already speculation swirling. Some believe Warren Buffett’s Berkshire Hathaway, which owns BNSF Railway, could step in. Others suggest that one of the large Canadian railroads, either Canadian Pacific Kansas City Limited or Canadian National Railway, might explore a deal. However, a merger with a Canadian buyer could raise political concerns. The Trump administration may be hesitant to approve a cross-border deal involving a non-U.S. company.
Despite the buzz, CSX shares were only up 0.5% on Thursday during midday trading and had pulled back from earlier highs.
CSX CEO Joseph Hinrichs addressed the topic during the company’s second-quarter earnings call on Wednesday night. Although he didn’t confirm or deny any merger discussions, he made it clear that CSX is open to opportunities that could increase value for its shareholders.
“There’s been a lot of rumour and speculation about consolidation in the railroad industry in recent weeks,” Hinrichs said in his opening statement. “While we cannot comment, we want to be clear that at CSX, we are focused on delivering shareholder value and are always open to anything that can help us achieve this objective.”
Later in the call, a question from JP Morgan analyst Brian Ossenbeck touched on the idea of rail consolidation. Hinrichs, who has a long background in the auto industry, avoided directly addressing any merger plans. However, he highlighted the need to make rail service more reliable and easier to use, especially if the industry wants to grow and compete better with trucking companies.
He said CSX is open to conversations that can grow the business, improve service, and create value, but he didn’t give specifics on how that might happen, or whether a merger is part of that plan.
While CSX remains quiet on any concrete moves, the company’s openness to “all possibilities” signals that something may be brewing behind the scenes. With major players like Union Pacific and Norfolk Southern making bold moves, it’s likely only a matter of time before CSX becomes a bigger part of the conversation.