France's Groupe Renault on Monday issued a statement saying it is "studying with interest" the terms of a proposed merger with Fiat Chrysler Automobiles N.V. (FCA).
News broke over the weekend that the world's eighth and ninth largest carmakers are in discussions about a merger that will eventually create the world's largest carmaker. An announcement to this effect is expected Monday.
"After careful review of the terms of FCA's friendly proposal, the board of directors decided to study with interest the opportunity of such a business combination, comforting Groupe Renault's manufacturing footprint and creating additional value for the Alliance," said Renault in a statement.
Renault said further communication will be issued in due course to inform the market of the results of these discussions, in accordance with applicable laws and regulations."
FCA has long indicated its interest in a merger.
"If there's a partnership, merger, relationship that makes us stronger, then I'm absolutely open to looking at it," said Fiat Chrysler's CEO Mike Manley.
Renault is a member of the Renault-Nissan-Mitsubishi Alliance, which has remained in the news because of the legal travails being borne by former CEO Carlos Ghosn, who remains jailed in Tokyo, Japan for alleged financial improprieties.
FCA's merger with the Renault-Nissan-Mitsubishi Alliance will establish a new entity with combined annual sales of 15.6 million units -- the world's largest. Previous reports suggested Renault wanted to merge with Nissan first before the combined entity acquires FCA. The fate of this plan is now uncertain.
The Renault-FCA talks are moving at a faster clip since they were first reported a few weeks ago. Both Manley and Renault CEO Thierry Bolloré support the merger.
Manley and Bolloré have previously said they're open to partnerships with other automakers. Their shared aim is to generate economies of scale that further slashes manufacturing and development costs. The acceleration of their separate electric vehicles (EVs) businesses is a priority for both car firms.
Renault's EV program is far ahead of Fiat Chrysler's. Neither firm, however, is a force to contend with in EVs, which is dominated by Tesla Inc.
Manley was once asked about the possibility of merging with another automaker.
Manley said they have made it clear in the past that Fiat Chrysler wants to be active and proactive to develop its business and improve the value for shareholders..He said the company is going into an environment where there are going to be opportunities.
