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

A combination could create the largest rail operator in the country with a sprawling rail network spanning the continent.

Union Pacific (NYSE:UNP) was raised to buy from hold at Jefferies after the railroad operator confirmed it was in talks with Norfolk Southern (NYSE:NSC) about a business combination. Investors should start building a position in Union Pacific (NYSE:UNP) to "get in on the ground level" on what is likely a "transformational" combination,