Union Pacific , the largest U.S. railroad operator, said on Thursday it is in advanced talks with rival Norfolk Southern , signaling that a deal to form a $200 billion coast-to-coast rail company could be close - and potentially trigger further consolidation among remaining freight rail giants.

Union Pacific and Norfolk Southern are confirming they're in merger talks that would create North America’s largest railroad, stretching service from East to West Coasts.

The combination of two large rail companies would create the first coast-to-coast network, but the deal could reduce competition.