Union Pacific is working with Morgan Stanley investment bankers to provide guidance on the potential acquisition of another Class I railroad, the online publication Semafor reported on Wednesday, citing people familiar with the matter.

Railroad operator Union Pacific is exploring a deal to buy smaller rival Norfolk Southern , the Wall Street Journal reported, in a merger that would bolster the industry leader's heft and likely draw intense regulatory scrutiny.

Union Pacific is reportedly considering acquiring a rival railroad, sending shares of CSX and Norfolk Southern higher.