Trump intervenes in US railway regulation! Announces dismissal of STB member, $75 billion railway merger likely to move forward quickly.

After US President Donald Trump announced the dismissal of Federal Reserve Board Member Cook, he turned his attention to the US transportation department. He dismissed a Democratic committee member of the Surface Transportation Board (STB), a US federal regulatory agency responsible for evaluating plans by Union Pacific Railroad (UNP.US) to acquire the railway transportation network's largest competitor Norfolk Southern (NSC.US) for as much as $75 billion. Under the favorable news of the acquisition, Norfolk Southern's stock price rose by about 3% in early trading on Thursday, with a current market value of about $63 billion, still significantly below Union Pacific's proposed acquisition price of up to $75 billion. Media reports on Thursday cited sources revealing that Democratic member Robert Primus, the only member of the regulatory agency who opposed the merger between Canadian Pacific Railroad (CP.US) and Kansas City Southern in 2023, was informed via email on Wednesday that he was dismissed by President Trump. "This is deeply troubling and legally ineffective," Primus wrote in an email response to the media. Primus told reporters that he will continue to fulfill his core role as a committee member, and if not, he will seek legal recourse. Primus was appointed as chairman of the Surface Transportation Board by former US President Joe Biden last year. After Trump began his second term as US President in January, he appointed Republican committee member Patrick Fuchs to succeed as chairman, while Primus remained on the committee as a member. The market interpreted the rumors around Trump's "dismissal" as lowering regulatory resistance, increasing and accelerating the likelihood and pace of Union Pacific's acquisition of Norfolk Southern being approved, hence Norfolk Southern's share price rose upon hearing the news. The news of Trump's dismissal of STB member Primus comes as STB has received a significant acquisition proposal from UNP-NSC and entered the formal process window, being interpreted by the stock market and investors as aligning the federal regulatory with the Trump administration's "transportation and infrastructure priority" policy. Dismissed STB committee member Primus was the only one who opposed the CP-KCS merger in 2023, with a cautious or even opposing attitude towards further consolidation in the railway transportation industry. His dismissal broke the previous "restraints" in important railway merger reviews and is widely seen as a signal of being more merger-friendly. However, Primus has called the dismissal "legally ineffective" and will challenge it legally. Legal challenges, public interest reviews, and safety/labor factors related to the merger may still impact the final outcome and timeline of the transaction.