Carmakers Nissan and Renault are discussing a possible merger and creating a new company, a report said Thursday.
"A deal would end the current alliance between the companies and marry them as one corporation," Bloomberg said, citing people with the knowledge of the situation.
Nissan currently holds a 15 percent stake at Renault, while the French carmaker owns 43 percent of its Japanese partner.
Renault shares jumped 6.4 percent to the top of the STOXX after Bloomberg reported Nissan and Renault weare in talks to merge.
The sources also said getting the deal done could prove very difficult as both French and Japanese governments would also have to approve it.
Reports of a Renault-Nissan alliance have surfaced intermittently since 1999 when plans for a full merger were first proposed, but such tie-up efforts have fallen through due to objections from France, Renault's biggest shareholder.
