U.S. Railroads: UP/ CN Agreements: A Big Step for UP and a Positive for CN

Research evidence excerpt

U.S. Railroads: UP/ CN Agreements: A Big Step for UP and a Positive for CN

Global Research

23 July 2026ab

U.S. Railroads Equities

AmericasUP/ CN Agreements: A Big Step for UP and a

Positive for CN Railroads

Thomas Wadewitz

Analyst

thomas.wadewitz@ubs.com

CN agreements provide a boost to UP's case for UP/NS merger +1-212-713 6116

On Wednesday night CN and UP announced two agreements. The first agreement Michael Triano

provides new access for CN to shippers who could see less rail competition (2 to 1 and 3 Analyst

to 2 shippers) due to a UP/ NS merger and also access to additional shippers in Southern michael.triano@ubs.com

Illinois and on the St Louis to Kansas City line. In exchange CN will no longer oppose the +1-212-713 3822

UP/ NS merger. Because it is the first significant agreement for UP which converts an Michael DiMattia

opposing party (Class I railroad or large shipper) from a position opposing the merger to Analyst

one of support, we believe it could provide a significant boost to UP's case for approval. michael.dimattia@ubs.com

Based on prior expert calls we have hosted, we believe support of other railroads or large +1-617-748 5628

shippers has historically been viewed by the Surface Transportation Board as among

significant factors when reviewing potential railroad mergers.

Agreement addresses several issues for UP; & expands CN's reach

The agreement between UP and CN to support the UP/ NS merger helps UP to address

several issues. The CN agreement addresses the issue of majority control of the terminal

(local) railroads in St. Louis and Kansas City which would have come under control of the

combined UP / NS. The CN/ UP agreement also provides a mechanism to sustain

competition for specific shippers who will go from 3 to 2 or 2 to 1 railroad options if UP/