There’s no clear connection between the president’s comments, in a conversation with Fortune, and the delay, announced by the regulatory body, the U.S. Surface Transportation Board (STB), on May 28. A pause is not unexpected for such a huge acquisition.

At the same time, Trump’s second term has been marked by unprecedented federal investments in publicly traded companies—from Intel to rare earths miners and refiners—all in industries deemed critical for national security. Trump didn’t specifically name any railroads when discussing the idea with Fortune, citing a “very big” railroad merger. But Union Pacific’s acquisition of Norfolk Southern is the only known pending deal in an industry that has only four major players in the U.S.

The proposed deal, which would be the biggest railroad merger ever, has inspired both political and industry opposition, driven by fears that the expanded Union Pacific Transcontinental Railroad, as the new company would be called, would consolidate monopoly power in freight shipping and lead to higher prices for consumers and fewer railroad jobs.

The White House and the STB did not respond to multiple requests for comment on the topic of a potential government ownership stake, nor did Union Pacific or Norfolk Southern.

David Vernon, senior transportation analyst for Bernstein, said the government successfully negotiating a federal stake as part of the merger process is “probably not going to happen.”

“It would depend a lot on what the terms are,” Vernon said, allowing that some arrangement could potentially be worked out regarding the federal government investing in Union Pacific for specific growth that enhances U.S. economic security, such as expansions that UP wouldn’t normally undertake on its own.

The analyst said that whatever form the investment might take, making the acquisition deal contingent on giving the administration getting a stake would be highly unusual. “‘Write a check to get your merger approved’ seems less palatable,” Vernon said. He then paused, before adding: “I guess that’s possible.”

“They said ‘No,’ but they’ll say ‘Yes'”

During a sit-down interview with Fortune on May 12, the president said that he wanted the government to gain an ownership stake in a pending railroad merger.

“I got another one coming, a railroad,” Trump said, of a deal that was currently in the works. “They want to expand. They want to merge, very big railroad, they want to merge. And I say, ‘Well, I want 15% of the railroad if you’re going to merge.'”

The companies declined, Trump told Fortune editor-in-chief Alyson Shontell, but he argued they will reconsider. “So they said ‘No,’ but they’ll say ‘Yes.’”

Trump then continued discussing his unique dealmaking record in his second term. “I make one of those deals every day that no normal person would make,” he said. “They actually say, ‘It’s very un-American.’ I said, ‘No, actually it’s very American.'” Such moves are part of a broader strategy, of growing federal revenue and assets without raising income taxes, that Trump and Secretary of Commerce Howard Lutnick have been pursuing, and which Fortune detailed in a recent story on Trump’s approach to business and the economy.

Like many large companies, Union Pacific is a corporate donor to Trump’s ballroom project at the White House. UP also recently unveiled a commemorative locomotive for the nation’s 250th anniversary. The locomotive is No. 4547, representing Trump’s status as the 45th and 47th U.S. president. Union Pacific has denied any connections between those actions and the pending acquisition. Last year, Trump spoke highly of UP and its CEO, Jim Vena.

What comes next for the merger

The Union Pacific-Norfolk Southern merger, which was first proposed last summer, is not facing an antitrust review under the purview of the Federal Trade Commission, as would be the case with most industries. Congress specifically exempted the freight railroad industry from FTC review, designating it to be regulated by the more specialized STB. While the FTC analyzes whether a merger lessens competition, the STB uses a broader “public interest” standard regulating “common carriers” in a concentrated but critically important industry.

In January, the STB rejected the initial application for Omaha-based Union Pacific’s $85 billion acquisition, including debt, of Atlanta-based Norfolk Southern in a cash-and-stock deal. The regulator said the application was incomplete and required a more thorough analysis on railroad congestion, the potential impact on commodities transported, pricing, and other factors.

On May 28, the STB accepted the revised application, which formally allows the deal to continue the acquisition process. But it also said that even more review is needed, triggering the temporary pause.

The STB said: “There are several aspects of the revised application that are unclear or underdeveloped and require supplementation at this stage of the proceeding so that the board may have the information necessary to thoroughly evaluate—and the public has an adequate opportunity to comment on—whether the transaction is in the public interest.”

“In a future decision, the board will establish an appropriate procedural schedule for the remainder of the proceeding,” the STB added.

The little-known STB has had only three board members of late. Trump appointed two of them—chairman Patrick Fuchs and Michelle Schultz. The third, Karen Hedlund, served in the Obama administration and was appointed by former President Biden. A fourth, Republican Richard Kloster, was just confirmed by the Senate and is set to join the board.

The federal government hasn’t owned any freight railroads since the 1920s, with the exception of the Alaska Railroad, now owned by that state. The government does hold majority ownership of the passenger rail Amtrak network.

Growing opposition

The pending acquisition has drawn significant opposition because only four major freight railroads are headquartered in the U.S.—after years of consolidation in an industry that isn’t growing. The other two are BNSF Railway, which is owned by Warren Buffett’s Berkshire Hathaway, and CSX.

A fifth U.S. railroad was consolidated out of the market three years ago when Kansas City Southern was acquired by Canadian Pacific Railway for $27 billion, after the smaller Canadian Pacific won a bidding war against its larger rival Canadian National. The resulting Canadian Pacific Kansas City (CPKC) created the only end-to-end rail network from Canada through the U.S. into Mexico.

Canadian Pacific’s regulatory argument at the time was that the two smallest North American railroads should be allowed to merge because their networks do not overlap and they connect neatly in Kansas City, Mo. The UP-NS deal, by contrast, involves UP, already the biggest publicly traded railroad, growing larger.

Union Pacific CEO Vena expressed confidence, in a prepared statement on May 28, that the deal will still be approved by mid-2027 as planned.

“We are confident this merger will deliver more reliable and lower-cost transportation options for American businesses,” Vena stated. “We submitted a comprehensive, data-driven application backed by a detailed plan for seamless integration. We look forward to the opportunity to show the facts and demonstrate the benefits for our customers, employees and America.”

The merger would create by far the largest railroad on the continent, with a combined enterprise value of $250 billion, 50,000 miles of rail across 43 states, and connections to roughly 100 ports and “nearly every corner of North America.” Vena contends the merger would create a stronger alternative to long-haul trucking, removing more than 2 million truckloads from roads annually.

But political and industry pushback is mounting. Senate Minority Leader Chuck Schumer, D-N.Y., has said the deal would push “us even further down the road of dangerous consolidation and monopoly power.”

“Right on cue, the companies are already making the same tired claims: this merger will promote competition, improve service, benefit workers and customers alike. History tells us the opposite,” Schumer said.

He framed the approval process as a test for the STB and the Trump administration: “Will they side with the railroad oligarchs, or will you side with workers and families? If Donald Trump rubberstamps another merger that hands over critical infrastructure to a corporate cartel, he’ll prove once again that he’s not on the side of working Americans.”

The Stop the Rail Merger Coalition, formed in late April, is also fighting the deal. Its members include Union Pacific’s archrival BNSF, CPKC, employee unions for both Union Pacific and Norfolk Southern, the Teamsters, and industry lobbying groups for the petrochemical and agriculture sectors.

“If allowed to move forward, the deal would create the largest consolidated railroad in U.S. history and give a single entity control over almost half of the nation’s rail traffic,” the coalition said.

“UP and NS have once again submitted an extremely flawed proposal,” the coalition added in a May 28 statement. “They have overstated benefits, minimized harms, and left critical questions unanswered. This merger is a bad deal for America and must be rejected.”

BNSF CEO Katie Farmer said the merger would “eliminate competition, raise costs for consumers, and destabilize the supply chain that powers the American economy.”