Union Pacific Corp. agreed to acquire Norfolk Southern Corp. in a $72 billion cash-and-stock transaction, forming the only US transcontinental railroad in what stands to be the industry’s largest deal ever.

Two of America's largest railroad companies are set to combine in an $85bn (£63.8bn) deal that would create the first firm with a coast-to-coast freight rail network in the US.

The $85 billion deal announced on Tuesday would create the nation's first coast-to-coast freight rail operator and reshape the movement of goods from grains to autos across the U.S., which are issues ...