Adds details and background throughout

July 31 (Reuters) - Railroad operator CSX CSX.O is working with Goldman Sachs GS.N to explore strategic options following a merger between its two major rivals, Bloomberg News reported on Thursday, citing people familiar with the matter.

Union Pacific UNP.N said on Tuesday it would buy smaller rival Norfolk Southern NSC.N 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.

Reuters reported last week that CSX was in talks to bring on financial advisers.

"We welcome all opportunities that would allow us to deliver value for our shareholders, drive pro-growth and serve our customers better," CSX CEO Joe Hinrichs said on a post-earnings call last week.

Goldman Sachs did not immediately respond to a Reuters request for comment. CSX declined to comment.

(Reporting by Anshuman Tripathy in Bengaluru; Editing by Tasim Zahid and Anil D'Silva)

((Anshuman.Tripathy@thomsonreuters.com;))