Canadian National (CN) has agreed not to oppose Union Pacific’s proposed acquisition of Norfolk Southern after the two railroads reached a wide-ranging agreement that strengthens both companies’ networks across North America.
As part of the deal, Union Pacific will gain access to one of CN’s most valuable rail assets: the former Elgin, Joliet & Eastern (EJ&E) line. The route allows trains to bypass Chicago congestion and connect more efficiently with Norfolk Southern’s Chicago Line heading toward the East Coast.
For CN, the agreement opens the door to new growth opportunities in Mexico. The railroad will receive operating rights over Union Pacific’s network between Memphis, Tennessee, and Eagle Pass, Texas, one of the busiest rail gateways into Mexico. The move strengthens CN’s position against competitor CPKC, which already offers single-line rail service between Canada and Mexico.
CN President and CEO Tracy Robinson described the agreement as a natural extension of the company’s north-south network.
“We are thrilled to have an agreement with Union Pacific to expand CN’s access to Mexico,” Robinson said. “It will open new routes for customers, provide greater choice, and strengthen connections between Canada and Mexico while creating new opportunities for growth.”
Union Pacific CEO Jim Vena, who previously served as CN’s chief operating officer, highlighted the importance of the EJ&E route, calling it the fastest way around Chicago.
CN acquired the line in 2009 to connect its networks in Western Canada, Eastern Canada, and the U.S. Gulf Coast. According to Union Pacific, trains using the EJ&E can move around Chicago in 12 hours or less, compared with an average transit time of approximately 35 hours through the region.
“I’ve seen firsthand the benefits of the EJ&E route around Chicago, and we look forward to having access to the quickest route around the city,” Vena said.
Both companies said they intend to move forward with the EJ&E and Mexico operating rights agreements as soon as possible. These portions of the deal are not dependent on regulatory approval of the proposed Union Pacific–Norfolk Southern merger.
Other elements of the agreement, however, will only take effect if the merger receives approval from the Surface Transportation Board (STB).
If the merger moves forward, CN would receive additional rights designed to preserve competition across the rail network. These include access to customer facilities where rail competition would otherwise be reduced, where commercially and operationally feasible.
CN would also acquire Norfolk Southern’s ownership interests in both the Kansas City Terminal Railway and the Terminal Railroad Association of St. Louis.
The agreement further grants CN new overhead operating rights between Tuscola, Illinois, and East St. Louis, Illinois, along with access to serve customers between St. Louis and Kansas City, Missouri, using Union Pacific’s network. CN would also gain a presence in Kansas City through access to Union Pacific’s Neff Yard.
Vena said the agreement supports Union Pacific’s commitment to maintaining competition despite the proposed merger.
“From day one, we’ve said our merger with Norfolk Southern will preserve and enhance competitive options while creating a stronger railroad for customers,” he said. “This agreement reinforces that commitment by expanding access and operating rights for a strong competitor.”
The proposed merger would also give Union Pacific two parallel routes across Missouri, combining its former Missouri Pacific main line with Norfolk Southern’s former Wabash route. Union Pacific has previously indicated it may eventually divest one of its St. Louis–Kansas City corridors.
For CN, the agreement also delivers access it previously sought during the merger between Canadian Pacific and Kansas City Southern. At that time, CN unsuccessfully asked regulators to require the divestiture of the Springfield, Illinois–Kansas City route, a request the STB ultimately rejected.
Robinson said preserving competition remains essential for rail customers across North America.
“This framework helps maintain competitive access to key markets, including Kansas City, while allowing CN to continue offering reliable and efficient transportation options,” she said.
The agreement also brings Union Pacific full circle. The railroad had explored acquiring the EJ&E as far back as 1995, viewing it as a strategic way to improve freight flows around Chicago. However, Union Pacific ultimately focused on its merger with Southern Pacific, leaving the EJ&E acquisition aside.
Today, access to the route could prove even more valuable. Union Pacific and Norfolk Southern estimate that eliminating traditional interchange operations in Chicago could reduce transit times by 24 to 48 hours. Using the EJ&E to bypass the region’s congestion could further shorten transit times while improving service reliability across one of North America’s busiest freight corridors.
