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

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.

Union Pacific (NYSE:UNP) was raised to buy from hold at Jefferies after the railroad operator confirmed it was in talks with Norfolk Southern (NYSE:NSC) about a business combination. Investors should start building a position in Union Pacific (NYSE:UNP) to "get in on the ground level" on what is likely a "transformational" combination,