The board of French car giant Renault is expected to decide Tuesday to begin merger talks with Fiat Chrysler which could create a new global giant spanning the United States, Europe and Japan.
US-Italian group Fiat Chrysler proposed a "merger of equals" with Renault last week, which has been welcomed by financial markets and has been given a conditional green light by the French government.
A merger would be "a real opportunity for the French auto industry," Finance Minister Bruno Le Maire told AFP on Friday of a tie-up which would bring together the flagship brands as well as Alfa Romeo, Jeep, Maserati, Dacia and Lada.
After preliminary talks over the last week, Renault directors are set to meet on Tuesday and decide whether to enter into formal discussions, which most observers expect it to do.
If combined, the two firms would produce 8.7 million vehicles a year, creating an industry powerhouse with an expected market value of some 36 billion euros ($40 billion).
But Renault already has an alliance with Japan's Nissan and Mitsubishi, and the combined mega-group would be by far the world's biggest, selling some 15 million vehicles, surpassing Volkswagen and Toyota, which sell around 10.6 million each.
Nissan, a long-time Renault partner, fears being sidelined by the deal and its chief executive, Hiroto Saikawa, warned Monday that a merger "would significantly alter the structure of our partner."
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