Nov 11 (Reuters) - Norfolk Southern ( NSC ) said on

Tuesday it had reached a five-year collective bargaining

agreement with the Brotherhood of Railroad Signalmen union.

The agreement, which is pending ratification from the union,

covers about 970 workers and provides for an 18.8% compounded

wage increase over the next five years.

Norfolk said it had already reached ratified agreements with

12 of its 13 unions.

"This agreement brings us closer to completing our full

slate of ratified union contracts," Norfolk CEO Mark George

said.

The announcement follows Union Pacific's ( UNP ) proposed

$85 billion merger with Norfolk, aimed at creating the first

U.S. transcontinental freight railway.

Last month, Norfolk beat Wall Street estimates for

third-quarter profit on strong merchandise volumes.