The Wall Street Journal, citing sources it did not identify, reported Wednesday that the boards of Fiat Chrysler and Peugeot approved the deal. The newspapers said that also affirming the deal is the board of Exor NV, the Agnelli family holding company that controls Fiat Chrysler.
The deal would create the world's fourth-largest automaker with a combined market value of around $50 billion. Neither company would comment. Experts say the two automakers would be able to share car, SUV and commercial vehicle designs, helping each other fill weaknesses and share costs that will make them a strong global player.
Fiat Chrysler Automobiles said Wednesday it is in talks with French rival PSA Peugeot in its second bid this year to reshape the global auto industry at a time of heightened uncertainty for the sector.
A merger would create the fourth-largest automaker with the potential for big savings in Europe just as the industry struggles with slowing sales and the need to invest heavily in new technologies like electric cars. But a deal does not help either in expanding in China, the world's largest market, where both are weak, analysts said.
In a statement, Fiat Chrysler said the discussions are "aimed at creating one of the world's leading mobility groups," but gave no further details.
Fiat Chrysler has long been looking for a partner to help shoulder investments in the capital-heavy industry, under the view that failure to consolidate would inevitably lead some companies to fall behind. The push is even more urgent given the transition across the industry to electric cars and autonomous driving — technologies where Fiat Chrysler lags.
Italian-American carmaker Fiat Chrysler Automobiles is confirming that it is in talks with French rival PSA Peugeot on a tie-up to create one of the world's largest automakers.
The statement on Wednesday didn't say whether the talks were aimed at a full merger or a looser alliance. No further details were given.
Fiat Chrysler has long been looking for a partner to help shoulder investments in the capital-heavy industry. Talks this year with another French carmaker, Renault, failed over French government concerns over the role of the Japanese partner Nissan.
Fiat Chrysler Automobiles was formed in 2014 out of a merger of Italian carmaker Fiat and the American company Chrysler, which Fiat brought back from the brink of bankruptcy.