(Reuters) -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.

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 confirmed that they are in “advanced” merger talks that would create a single U.S railroad with service stretching from the East to the West Coast. The Associated Press reported last week that the companies were discussing a tie-up but neither company acknowledged that until Thursday morning.