French automaker Renault's board will meet Tuesday to consider a merger offer from Fiat Chrysler.
It would create the largest automaker in the world based on sales, but that's only if Renault's current partner, Nissan, stays in.
If Nissan were to back out, a merger would create the world's third largest automaker.
Michelle Krebs is an analyst with Autotrader. She says both companies have good reasons to consider the agreement. For the most part, neither automaker's products would compete with each other, but there could be potential barriers to make the deal a reality.
"A lot of times these deals look good on paper. We remember the Daimler Chrysler deal looked really good on paper but it didn't work well because the cultures didn't mesh," says Krebs.
Krebs says Fiat Chrysler would gain Renault's expertise in electric and small vehicles, as well as Renault's extensive dealership network in the Middle East and Africa.
Renault would benefit from Fiat Chrysler's profitable Jeep, SUV, and truck sales in North America.