Union Pacific said on Tuesday it would buy smaller rival Norfolk Southern in an $85 billion deal to create the first U.S. coast-to-coast freight rail operator and reshape the movement of goods from grains to autos across the country.

The Union Pacific and Norfolk Southern corporations announced Tuesday the companies will merge to create America's first transcontinental freight railroad.

Union Pacific is seeking to buy Norfolk Southern in a $85 billion deal that would create the first transcontinental railroad in the U