Fiat Chrysler and France's PSA - owner of Peugeot and Citroen - have confirmed plans for a merger.
The deal will create the world's fourth-largest automaker.
Fiat Chrysler also owns brands including Jeep and Dodge.
While PSA brings marques including General Motors' former European brands, Vauxhall and Opel.
Boards of the two groups have mandated teams to finalize a deal within weeks.
The combined firm will have sales of about 8.7 million cars per year.
It's hoped the deal will deliver savings of over 4 billion dollars per year.
And help fund investment in electric and driverless cars.
But Paris says it will be watching very closely to make sure there's no impact on plants or jobs in France.
Fiat Chrysler shares gained over nine percent Thursday (October 31) morning following the news.
PSA stock slid by a similar amount, wiping out earlier big gains made on rumours of the deal.