The Italian-American multinational is a prime target for the French firm, according to the Financial Times who cited several people familiar with Renault's plans, and former Renault CEO Carlos Ghosn held talks with Fiat in recent years before his arrest in Japan on financial misconduct charges.
The FT also reported that Fiat Chrysler Chairman John Elkann is open to a potential partnership or merger in a bid to boost his firm. A combination of Renault, Nissan and Fiat Chrysler would be viewed as a viable rival to the current global auto leaders, Volkswagen Group and Toyota.
Renault, Nissan and Mitsubishi are not officially merged but all three carmakers operate a partnership under a complex arrangement of cross-party share ownership.
The arrangement was plunged into crisis in November last year when former Nissan chairman and Renault CEO Carlos Ghosn was arrested in Japan following allegations of financial misconduct, which he denies.
Shares in Renault have risen 2.5 percent during Wednesday's European trade, while Fiat Chrysler is up more than 3 percent.
Renault and Fiat Chrysler were not immediately available for comment when contacted by CNBC.
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