Railroad operator Union Pacific is holding talks to acquire its smaller rival Norfolk Southern in what would be a megamerger in the railroad industry, according to people familiar with the matter.

Union Pacific , the largest U.S. freight railroad operator, is exploring a possible acquisition of Norfolk Southern to create a $200 billion coast-to-coast rail network, a person familiar with the matter said.

Union Pacific and Norfolk Southern are in merger talks to create the largest railroad in North America that would connect the East and West Coasts.