Sina Finance on the 18th, according to sources, the board of directors of the French automaker PSA Group approvedFiat ChryslerThe merger will create the world's fourth largest carmaker.

Fiat Chrysler's board is also meeting to discuss the deal, according to sources who spoke on condition of anonymity because of the secrets involved. A spokesman for PSA declined to comment.

PSA and Fiat announced their merger plans six weeks ago.

The merger will create a regional auto giant that can compete with Volkswagen, with a market capitalization of about $46 billion-more thanFord Motor.

The merger would also be a marriage between the Agnelli family, headed by Fiat chairman John Elkann, and the French Peugeot family.

China Dongfeng Motor, which owns 12% of PSA, will own 4.5% of the combined company, a person familiar with the matter said.

The merger will give PSA access to the long-coveted North American market and will also help Fiat develop low-emission technologies.

However, Juergen Pieper, an analyst at Bankhaus Metzler, said on Tuesday that the merger would not solve all their shortcomings.

Pippen said that the merged company still does not have a very high-end brand, and its market position in China is not strong enough.