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Will CSX Explore Merger Options Post Pressure From Activist Investor?

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Key Takeaways

  • Ancora Holdings criticizes CSX's deteriorating performance under CEO Joe Hinrichs.
  • CSX's operating ratio worsened from 58% in 2022 to about 67% year to date 2025.
  • Ancora Holdings urges CSX to explore merger options with BNSF or CP to boost shareholder value.

CSX Corporation (CSX - Free Report) is currently grabbing everyone’s eyeballs after facing criticism from its investors due to its lackluster performance and failure to engage in merger talks to strengthen its foothold in the railroad industry.

In a letter to CSX’s independent members of the board of directors, activist investor Ancora Holdings has expressed its concerns and dissatisfaction over CSX’s current deteriorating operational performance under chief executive officer (CEO) Joe Hinrichs.

The letter clearly states how CSX is failing to generate higher shareholder returns since 2022 (as compared to previous years); grappling with awful operating ratios, ranging from 58% (when Mr. Hinrichs joined) in 2022 to approximately 67% year to date; lack of competent and experience employees and failure to grab the opportunity of seeking a railroad merger in the industry.

Ancora Holdings’ thoughts about CSX CEO have been supported by analysts, customers, former industry executives, retired regulators, and an array of current and prospective shareholders, who all agree on the fact that CSX has come down to the current difficult position.

Apart from this aforesaid ongoing disappointing scenario of CSX, Ancora Holdings is highly stressed about the fact that once Norfolk Southern Corporation (NSC - Free Report) and Union Pacific Corporation (UNP - Free Report) start operating, if their merger materializes, CSX’s operations would be hurt. As a result, Ancora Holdings is urging CSX’s board to explore merger options.

Ancora Holdings suggests discussions with both BNSF Railway Company and Canadian Pacific Kansas City Limited (CP - Free Report) to explore all merger options for maximizing shareholder value. While BNSF being a cash buyer can bring a highly disciplined approach to any negotiations, CPKC might prove beneficial for CSX as it gears up to compete in a new railroading environment.

Given this backdrop, we keenly await seeing in which direction CSX finally heeds, whether it chooses to go for merger options (as stressed by investors) or it opts for any other strategic business move to stand still in the railroad industry. The upcoming weeks are highly crucial for CSX’s management team.

Currently, CSX, CP and UNP carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NSC carries a Zacks Rank #4 (Sell).

CSX’s Share Price Movement

Shares of CSX scaled a 52-week high of $37.25 in the trading session on Aug. 19, 2025, before closing a tad lower at $36.52. The surge comes on the heels of Ancora Holdings’ interest in the stock.

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