Union Pacific is in talks to merge with Norfolk Southern, The Wall Street Journal reported Thursday, in a deal that would shake up the railroad business in America. The Journal cited people familiar with the matter.

The rails sector is on high alert following reports that Union Pacific (UNP) is focused on acquiring Norfolk Southern (NYSE:NSC), which could create the nation's first coast-to-coast rails network if the deal cleared regulatory and White House scrutiny.

Railroad operator Union Pacific is exploring a deal to buy smaller rival Norfolk Southern , the Wall Street Journal reported, in a merger that would bolster the industry leader's heft and likely draw intense regulatory scrutiny.