Fiat Group, Chrysler and its parent company Cerberus Capital Management in January released a joint statement announcing they had signed a non-binding term sheet to establish a global strategic alliance. The alliance, a key element of Chrysler’s viability plan, would provide the American carmaker with access to competitive, fuel-efficient vehicle platforms, new powertrains, and components to be produced at Chrysler manufacturing sites. Soon after the initial statement, rumors suggesting PSA Peugeot-Citroen could also be in merger talks with Fiat quickly emerged.

Both companies have since denied the rumors, telling Italy's Il Sole 24 Ore newspaper that there are no plans to merge with any other parties. However, both have reiterated that they are open to cooperating with other companies on projects that could create industrial synergies or open access to new markets.

According to an insider, however, Italian investment bank Mediobanca has been contacted by Fiat about drawing up a report on merging Fiat's automotive operations with those of PSA. Previous reports also suggested that Fiat was searching Europe to secure a credit line of up to €5 billion to finance a takeover of PSA.

While no one is suggesting that Fiat and PSA are about to merge, it’s often the case that the companies deny rumors only when there is some truth behind them. We wouldn’t be surprised to see some kind of a deal forged, though don’t expect a full blown alliance like the one that will likely take place between Fiat and Chrysler.