Renault SA and Fiat Chrysler Automobiles NV have discussed the possibility of a merger as they explore options for combining their businesses, according to people familiar with the matter.

Talks between the two sides were in an advanced stage on Sunday and included a range of possible outcomes, the people said. The companies are expected to announce on Monday an agreement to cooperate in areas that include electric vehicle technology, manufacturing platforms and connectivity, the people said.

The companies could also announce they are studying a merger of equals, the people said. Another option under discussion is for Fiat Chrysler FCAU, +0.94%   and Renault RNO, +0.59%   to swap shares as part of an initial accord that paves the way for a merger at a later date, the people said.

Renault Chairman Jean-Dominique Senard met with French Finance Minister Bruno Le Maire on Friday and presented the merger plan, one of the people said. The French state, which owns 15% of Renault, is not opposed to a merger, the person said. “This is definitely about more than a platform or a JV,” the person added. Renault has called a board meeting for Monday, another person familiar with the matter said.

An expanded version of this report appears on WSJ.com.

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