Fiat Chrysler Automobiles NV is nearing a preliminary agreement to merge with Renault SA, according to a person with knowledge of the matter.

Potential hurdles raised by the French government, Renault’s most important shareholder, have been overcome, said the person, who asked not to be named discussing private negotiations. Renault’s board was still meeting late Wednesday in Paris, with no guarantee an agreement will be reached, people familiar with the matter said.

France, which owns a 15 per cent stake in the French carmaker, has sought assurances on job guarantees and its role in governing the combined company since Fiat proposed the 50-50 deal last week.

An official with the French finance ministry declined to comment, as did representatives of Renault and Fiat.

Fiat shares were fell 1.1 per cent to US$13.19 at the close in New York. The stock spiked briefly after Reuters first reported on progress toward an accord.