Report: Fiat Chrysler and France's PSA agree to merger terms

Fiat Chrysler Automobiles and the parent of France's Peugeot have agreed on the terms of a merger that, if approved by both boards, would create the fourth-largest automaker in the world, the Wall Street Journal reports, citing unnamed sources.

Why it matters: Scale is important in the auto industry, especially in light of the huge investments required in new technologies like electric vehicles and autonomy. Peugeot CEO Carlos Tavares, who would lead the new company, is known as a gutsy executive willing to take chances to survive disruption. Nevertheless, auto industry mergers have a history of failure.

What to watch: Peugeot's board has approved the deal, WSJ reports, while the boards of FCA and Exor — the Agnelli family holding company that controls the Italian American carmaker — could vote later on Wednesday.

Go deeper: Fiat Chrysler expected to announce merger with Peugeot-owner PSA