Fiat has confirmed that it wants to acquire General Motors' European operations and to do so the Italian auto giant may form a new company to combine its Fiat car brands (Fiat, Lancia, Alfa Romeo) along with Chrysler and any acquired GM entities. The information was revealed in a statement issued by Fiat’s board on Sunday, which also stated that the new company would earn more than $106 billion in annual revenues and become the world's second-largest auto group after Toyota.

Fiat's board "expressed its full support” for the initiative which will begin in the next few weeks with an assessment of the viability of such an acquisition. Speaking with the Financial Times, Fiat CEO Sergio Marchionne said he wanted to join Fiat’s auto division with Opel, Vauxhall and even Saab. Along with Chrysler, the new entity would have sales of 6 million to 7 million vehicles a year.

Marchionne also said he hopes to complete the transaction by the end of May and list shares of the new company, tentatively called Fiat/Opel, by the middle of the year. Major hurdles to the deal, however, are a rival bid for GM’s European operations from Magna International as well as opposition from German trade unions.

If the deal goes ahead, Fiat and Opel will be able to merge a number of platforms, including A, B, C, and D segment architectures, and reap more than $1 billion in synergies.

Marchionne is a strong believer of mass consolidations and even predicts that the future landscape of the auto industry will see only six carmakers survive - one American house, one German of size, one French-Japanese, maybe with an extension in the U.S., one in Japan, one in China and one potential European player.