TURIN -- Fiat Group and PSA/Peugeot-Citroen today denied an Italian newspaper report that the two companies could merge their automotive operations.

Fiat said it does not plan any merger with other automakers other than its proposed alliance with Chrysler LLC, which will see Fiat take a 35 percent stake in Chrysler, possibly rising to 55 percent.

But Fiat said it is open to cooperating with other companies on projects that could create industrial synergies or open access to new markets.

PSA said it "did not comment on "rumors."

Italy's Il Sole 24 Ore newspaper said the Italian investment bank Mediobanca has drawn up a report with a strategic consultant on merging Fiat's automotive operations with those of PSA.

The newspaper said the company resulting from the merger would be headquartered in Paris, with the Italian side accounting for about 41 percent to 45 percent of the shareholding.

Citing financial sources, the newspaper said Fiat CEO Sergio Marchionne is assessing whether and when to present the report to the Fiat board.

A Fiat statement said the company's board is not currently considering a merger with another automotive group other than its planned alliance with Chrysler.

“It is a known fact that - as is true for other groups in the sector - Fiat frequently examines opportunities for agreements of various types which would offer it operational synergies and access to new markets,” the statement said.

Fiat and PSA have worked together for more than 20 years on two joint ventures in France and Italy to build large minivans and light commercial vehicles.

Auto bosses and industry analysts expect a wave of consolidation as the global economic crisis continues to hit automakers hard.

In December, Marchionne told Automotive News Europe that volume carmakers could only survive if they produced at least 5.5 million cars a year that share common vehicle architectures.

Lawrence J. Speer contributed