(Reuters) -Union Pacific said on Thursday it was in advanced discussions with rival Norfolk Southern for a possible mega merger that would create a transcontinental railroad behemoth.

Norfolk shares were up 3.5%, while Union Pacific fell 2.3% in premarket trading.

A deal, if it goes through, will combine Union Pacific’s dominant position in the Western two-thirds of the U.S. with Norfolk’s 19,500-mile route predominantly spanning 22 eastern states.

Norfolk has a market value of about $63.2 billion, while Union Pacific was valued at around $138 billion, according to LSEG data.

There can be no assurances as to whether an agreement for a transaction will be reached or as to its terms, Union Pacific said.

The North American railroad industry has struggled with volatile freight volumes, ri

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