Fiat Chrysler and PSA look set to win EU approval for a $38 billion merger that would create the world's number-four carmaker.
That's according to sources close to the matter.
The automakers hope the tie-up will help fund a shift to cleaner vehicles.
If the EU gives the go-ahead it would formalize the creation of a group called Stellantis.
It could use profits made from selling pickup trucks and SUVs in the U.S. to pay for the development of zero-emission vehicles for sale in Europe and China.
The all-share merger was announced late last year, and would unite brands such as Fiat, Jeep and Dodge with the likes of Peugeot and Citroen.
It would also aim to make annual cost cuts of $6 billion without closing factories.
To allay EU antitrust concerns PSA has offered to strengthen Japanese rival Toyota - with which it has a van joint venture - by ramping up production and selling vans at close to cost price.
FCA and PSA will also allow their dealers in certain cities to repair rival brands.
The sources said the EU decision could come by the end of the year - ahead of the official deadline of February 2.
The two automakers have said they hope to complete merger by the first quarter next year.
The European Commission and Italian-American group Fiat Chrysler declined to comment.
France's PSA also did not immediately respond.
Shares were up in both companies Monday - PSA rose around 3%, while Fiat Chrysler gained as much as 6%.