Union Pacific Corp. could reach an agreement to acquire Norfolk Southern Corp. and create a transcontinental rail behemoth as soon as early next week, people familiar with the matter said.

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

Union Pacific , the largest U.S. railroad operator, could reach an agreement to acquire rival Norfolk Southern as soon as early next week, Bloomberg News reported on Friday, citing people familiar with the matter.