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France, Peugeot family said to back PSA-Fiat Chrysler merger

Peugeot SA's planned merger with Fiat Chrysler Automobiles NV is said to have gained support from two of the French automaker's major shareholders, the Peugeot family and the French government.

Both the carmakers have called board meetings Dec. 17 to consider the next steps to finalize a deal. An announcement on the matter will likely be made on Dec. 18, according to Bloomberg News.

Entities representing the Peugeot family have approved a proposed memorandum of understanding for the merger, Reuters reported Dec. 17, citing a source familiar with the situation.

The Peugeot family entities, namely Etablissements Peugeot Freres and FFP, own a combined 12.5% stake in the carmaker.

The French government, which owns about 12% of the carmaker, also backed the deal, Bloomberg News reported Dec. 16, citing people familiar with the matter.

Representatives for both Fiat and Peugeot decline to comment, the report added.

The combination of the two automakers is expected to create the world's third-largest automaker by unit sales. Analysts noted that Fiat's strong presence in the North American market will complement Peugeot's solid performance in Europe.