The boards of Fiat Chrysler Automobiles and Peugeot maker PSA Group were meeting separately on Tuesday to discuss finalizing an initial agreement for a $50 billion merger to create the world's number four automaker, people familiar with the matter told Reuters.

A person close to FCA said the two companies could announce the signing of a binding memorandum early on Wednesday, followed by a conference call to explain further details later in the day.

Ahead of the meetings, entities representing the Peugeot family, Etablissements Peugeot Freres and FFP, unanimously approved a proposed memorandum of understanding for the planned merger, a person familiar with the situation said.

The French state, which owns about 12 percent of PSA and has board representation, supports a binding memorandum of understanding that reflects minor changes to an accord unveiled by the two automakers on Oct. 31, Bloomberg reported on Monday. The combination "makes sense in order to build a new champion with global scale to take on the challenges of sustainable mobility," a French finance ministry official said in a statement.

FCA and PSA announced their plan six weeks ago to create an automotive powerhouse that would challenge Volkswagen Group in Europe, while maintaining Chrysler's Detroit 3 presence in the U.S.

The new company would be based in the Netherlands and headed by PSA CEO Carlos Tavares. Fiat Chrysler Chairman John Elkann would keep his role as chairman.

The deal will turn two midsize automakers into a global giant, with sales of more than 8 million vehicles a year and a stable of brands including PSA's Peugeot and Citroen and Fiat Chrysler’s Jeep, Alfa Romeo and Ram.

The automakers are responding to growing pressure on the industry to pool resources for product development, manufacturing and purchasing in the face of trade tensions, a global sales slowdown and an expensive shift toward electric and self-driving technology.

Reuters and Bloomberg contributed to this report

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Ford Motor Co., Toyota Motor Corp. and General Motors topped the industry in the Rainbow/PUSH Coalition's 2019 Automotive Diversity Scorecard released this month.

The organization also lauded improvements by Fiat Chrysler Automobiles, Honda Motor Co. and Nissan Motor Co.

The scorecard judges automakers on their commitment to improving diversity in employment, advertising, marketing, procurement, dealers and philanthropy.

Companies are scored as either green, yellow or red. Green signals that a company is using best practices to build ethnic diversity and has shared its goals, initiatives and investments in this area. Yellow indicates diversity is evident, but not all dollar investments, key figures and other factors were disclosed.

Red means diversity initiatives were nonexistent or undisclosed or that there was not relevant information provided for scoring.

Ford and Toyota had green marks in five of the six categories. Both had yellow ratings for dealerships. Ford ranked third in the industry, with 168 minority-owned dealerships at the end of 2018, while Toyota was fifth, with 74, according to the National Association of Minority Automobile Dealers.

GM, the only automaker with a green rating for dealerships, had 278 minority-owned stores, the most in the industry. Overall, GM got four green ratings.

"Toyota and Ford have done very well because both have African American agencies of record, moreover, their procurement spend has been very strong," John Graves, chairman of the Rainbow/PUSH Automotive Project, said in an email to Automotive News. "Lastly, the commitment in the C-suites has been exceptional."

FCA, Honda and Nissan "have shown the most improvement by increasing their advertising and procurement spend with African American companies," Graves said.

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