Union Pacific Corp. sought government approval Thursday to buy Southern Pacific Rail Corp., saying the deal would save the railroads more than $750 million annually and improve Western freight service.

But Union Pacific acknowledged in its application with the Interstate Commerce Commission that the $5.4 billion merger would cost nearly 3,400 jobs, mostly administrative and management positions in San Francisco and Denver.

Southern Pacific’s headquarters in San Francisco also would be closed.

The proposed merger announced last August would create the largest freight railroad in North America, with 31,000 miles of track operating in 25 states, Canada and Mexico. It would have combined revenue of $9.54 billion.

“The merged system will have shorter routes, expanded single-line service, faster schedules, more frequent and reliable service and improved equipment supply,” the application said.