BNSF Railway Co. slammed the proposed mega-merger between two key rivals as benefitting shareholders at the expense of customers, marking some of the most direct criticism of a deal drawing scrutiny from lawmakers and across the industry.

The $72 billion combination of Union Pacific Corp. and Norfolk Southern Corp. doesn’t propose adding new capacity to the network and won’t create fresh investment, said Zak Anderson, chief of staff and a vice president at BNSF. The North American rail industry is already concentrated heavily among just a handful of companies, raising additional questions over competition, he said.

“This a straight Wall Street transaction,” Anderson said in an interview.

“Union Pacific is disappointed that BNSF as part of the Berkshire Hathaway family, which is publicly traded, would continue to spread misinformation,” Union Pacific said in a statement. “We have not yet submitted our application to the Surface Transportation Board, which will demonstrate how the deal is good for customers who want new options, union employees whose jobs will be protected and enhance the U.S. supply chain for consumers.

The public rebuke from BNSF, which is owned by Warren Buffett’s Berkshire Hathaway Inc., adds to concerns voiced Thursday by U.S. lawmakers. A bipartisan group of 18 senators sent a letter asking the Surface Transportation Board, the regulator tasked with approving any potential rail deal, to conduct a “rigorous and comprehensive evaluation” of the potential long-term effects on industry competition.

The letter highlights the deal’s potential negative impacts on agricultural supply chains, competition in what is already a consolidated market and the risk of broader economic disruption during integration.

Anderson, who joined BNSF in 2006 having previously worked for former U.S. Senator Max Baucus, also called the merger’s growth projections “unrealistic.”

“When this growth doesn’t materialize, what do you do?” he said. Typically, the next move is to either raise customer rates or cut costs, he added. Either way, “after almost every merger, there’s been significant service challenges.”

Other industry executives are also critical of the proposed deal. Keith Creel, chief executive officer of Canadian Pacific Kansas City Ltd., said the merger represents overlapping key markets and the sheer size of the deal introduces “unprecedented risk by heavily concentrating much of the decision making for our national rail network.”

“We strongly believe further consolidation is not necessary at this time and is not in the best interest of the industry, the shippers or the U.S. economy,” he said in an earnings call Wednesday.

Union Pacific and Norfolk are expected to file their merger application with the Surface Transportation Board in late November or early December, after which the formal merger review can begin.

(With assistance from Stephanie Hughes.)

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