Fiat Chrysler and Renault are considering an exchange of shares as part of a merger

Car manufacturers Fiat Chrysler and Renault are considering an exchange of participations or reciprocal investments in the context of large-scale negotiations that will be confirmed Monday, according to relatives of the two companies.

Discussions between the two parties on extensive cooperation were first reported by the Financial Times the Saturday. An agreement would help groups pool their resources as they struggled to survive in a sector plagued by falling sales and technological upheaval.

The two manufacturers are expected to announce that they are negotiating for collaboration in several areas, including connectivity, electric vehicle technology and manufacturing platforms, officials said.

They are also likely to say that the discussions include the possibility of an exchange of stakes, which could take the form of an exchange of shares or an investment in each other's business, added one of the people.

This person said that FCA's cooperation with Renault was conditional on the short-term merger of Renault and Nissan shelf-layout plans, a decision that would allow French and Japanese companies to focus on their own activities. It is unlikely that this condition will be included in the planned announcement on Monday, added the person.

Discussions are continuing and may not result in an agreement, warned relatives of the discussions.

Renault and FCA refused to comment.

An announcement is scheduled Monday morning. Renault should hold a meeting of the board of directors immediately afterwards to review the proposals.

The negotiations with FCA will allow Renault to expand its options as its global alliance with the Japanese company Japan is facing the deterioration of its profits in the United States and the evolution of the sector to autonomous electric vehicles.

The reason for the discussions with FCA is purely strategic and there is no intention to fortify Nissan over other potential scenarios, according to a person close to the management of the French company.

"It's really a win for everyone. It's not to hurt or disavow anyone, "said another person informed of Renault's thinking.

Nevertheless, negotiations to add a new partner to the alliance should further weigh on relations with Nissan as leaders prepare to meet for the monthly meeting of their alliance in Tokyo on Wednesday.

Additional report by Arash Massoudi