Dear Mr. Baakko:
Union Pacific did, in fact, acquire all the former railroads. Perhaps this will explain the SP transaction a bit better.
A Union Pacific Corporation subsidiary (not UPRR) acquired Southern Pacific Rail Corporation ("SPC") effective September 11, 1996.
Missouri Pacific Railroad Company ("MPRR") was merged into UPRR effective January 1, 1997. The Denver and Rio Grande Western Railroad Company ("DRGW"), part of SP, was merged into UP effective June 30, 1997, as was the SPCSL Corporation ("SPCSL"). SPCSL was merged into UP effective June 30, 1997. The St. Louis Southwestern Railway Company ("SSW"), another piece of SP, was merged into UP effective September 30, 1997.
Union Pacific Railroad Company, a Utah corporation, was merged into Southern Pacific Transportation Company, a Delaware corporation ("SPTC")
effective February 1, 1998. While SPTC was the entity surviving the merger, this entity immediately changed its name to "Union Pacific Railroad Company" when the merger became effective. The resulting Union Pacific Railroad Company is a Delaware corporation, and there is no longer a company named Southern Pacific Transportation Company.
The short answer in layman's terms is that UPC bought the SP and as part of the corporate consolidation merged UP Railroad into the SP entity that was the railroad and a Delaware corporation, but changed the name of the resulting company to Union Pacific Railroad Company.
I think it can be summarized as based on accounting, tax and legal considerations.
John Bromley, Director Historic Projects
Union Pacific Railroad Museum