Both the PSA Group and Fiat Chrysler Automobiles have confirmed there are ongoing discussions regarding a possible merger between the two firms.

A statement on the PSA Group website read: “Following recent reports on a possible business combination between Groupe PSA and FCA Group, Groupe PSA confirms there are ongoing discussions aiming at creating one of the world’s leading automotive groups.”

It was reported by the Wall Street Journal that a merger was on the table, with a view of creating a $50bn global business. Following the reports, Fiat Chrysler shares jumped 7.5%.

Discussions remain in early stages, according to reports, with the merger expected to face significant political and financial hurdles should an agreement be reached. Peugeot chief executive Carlos Tavares has been touted to lead the combined business as its chief, while John Elkann, chairman of Fiat Chrysler would keep his role at the new company.

Should a deal go through, a number of brands including Alfa Romeo, Citroen, Jeep, Opel, Peugeot and Vauxhall would be brought under one umbrella.

The move follows on from PSA Group’s merger with Opel and Vauxhall last year, which saw Frédéric Brunet and Xavier Duchemin appointed as managing directors on 1 August 2018.

Elsewhere, FCA Group withdrew its offer to merge with French car manufacturer Renault in June this year, in a deal that could have been worth up to  €32.6bn (£28.3bn). The offer was withdrawn after a six hour meeting between Renault board members ended with members, including the French government which owns a 15% stake, requesting a delay.