PARIS (AP) — French carmaker Renault looks set to give its approval to Fiat Chrysler's merger offer.

The company's board is meeting Tuesday afternoon at its headquarters outside Paris to decide on a deal that could reshape the global auto industry.

Renault is deciding whether to go ahead with merger negotiations to create the world's third-biggest automaker, worth almost $40 billion, and combine forces in the race to make electric and autonomous vehicles.

The French government, which owns 15 percent of Renault, has held talks with the carmakers in recent days, and a government official says the "dynamic is positive." The official said the merger would produce a Netherlands-based holding company with operational headquarters in France.

The deal poses questions about the future of Renault's alliance with Nissan and Mitsubishi.