The PSA Group – which owns Peugeot, Citroen, DS and Vauxhall brands – has confirmed that they are looking into merging with US-Italian rival, Fiat Chrysler.
This proposed merger between the two car manufacturing giants would create a business with a combined value of over £40bn.
Shares in Fiat Chrysler jumped 7.5% on the New York Stock Exchange following the announcement.
Fiat Chrysler had earlier this year been in discussions with Renault about a merger – however, they pulled out of a deal in June.
Should any deal be confirmed, it is believed that current PSA CEO Carlos Tavares would become the new group’s Chief Executive, with senior members at Fiat Chrysler retaining their positions within the restructured company.