Fiat Chrysler and Peugeot owner PSA unveiled a plan on Thursday for a 50-50 share merger to create the world's fourth-largest automaker.

The companies said they aimed to reach a binding deal in the coming weeks to create a 50 billion U.S. dollar group with listings in Paris, Milan and New York. PSA's Carlos Tavares would be CEO and Fiat Chrysler's (FCA) John Elkann chairman.

The deal is expected to create a company with combined annual sales of some 170 billion euros (190 billion U.S. dollars) per year and 11 billion euros of operating profits.

However, the tie-up is still under close regulatory scrutiny as governments are all likely to be worried about potential job losses of around 400,000.

FCA shares jumped as much as 11 percent to a one-year high of 14.248 euros. PSA shares fell as much as 14 percent to a two-week low of 22.33 euros.

Record North America operating profit in third quarter

Fiat Chrysler on Thursday posted higher than expected operating earnings for the third quarter, lifted by its North American business.

FCA's adjusted earnings before interest and tax (EBIT) increased five percent to reach 1.96 billion euros (2.18 billion U.S. dollars), as strong pricing drove a record result in North America despite a decline in overall shipments.

Margins on adjusted EBIT in FCA's North America region rose 40 basis points year-on-year to 10.6 percent.

FCA added it expected a further improvement of its financial performance in 2020.

Milan-listed shares in FCA were up 8.2 percent at 1215 GMT.

(With input from Reuters)