The blockbuster deal raises the odds that Buffett’s Berkshire Hathaway, which owns the Burlington Northern Santa Fe railroad, will reach a deal with CSX to create a second transcontinental railroad. Union Pacific and BNSF compete in the western U.S., while CSX and Norfolk Southern are the two big Eastern railroads.

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 ...