Union Pacific Corp. is nearing an agreement for a stock-and-cash deal for Norfolk Southern Corp. that would value the smaller rival at about $320 a share, people familiar with the matter said, in what would be the rail industry’s biggest-ever tie-up.

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

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.