The board of the PSA Group has reportedly given the green light to CEO Carlos Tavares to further negotiate a merger with Fiat Chrysler Automobiles.
Citing a source familiar with the matter, Reuters reports that the two car makers are moving closer to a deal that could create a new global entity able to reshuffle the balances within the auto industry.
FCA’s board is expected to meet with the board of Exor, the holding company of the Agnelli family that controls Fiat Chrysler, later today the report adds.
A formal agreement is anything but certain at this point, as the deal could collapse as negotiations dig deeper into the details of the merger, but the two car makers are making quick progress towards an announcement that could come as early as Thursday morning.
Previous reports suggested that if the deal between FCA and PSA goes through, it would have FCA Chairman John Elkann as the chairman of the merged entity and PSA CEO Carlos Tavares would be CEO. The board of the merged company would give six seats to PSA and five seats to FCA.
Earlier today, both Fiat Chrysler and the PSA Group confirmed they were in talks about a possible merger, without providing any further information. The two car makers sold a combined 8.7 million vehicles last year, which would position their proposed merged unit in fourth place, ahead of General Motors.
The French government currently holds a 12 percent stake in PSA, as does the Peugeot family and Dongfeng Motor, which in turn is owned by the Chinese government.