Trump floated the idea of a 15% government stake in a massive railroad merger

President Donald Trump recently expressed interest in the federal government acquiring a 15% stake in a massive railroad merger—remarks that took on new resonance this week when a federal regulator put the $71.5 billion merger of Union Pacific and Norfolk Southern on pause for additional review.

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........

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