Peugeot, Dongfeng sign capital tie-up plan -source

PARIS Tue Feb 18, 2014 9:46am EST

PARIS Feb 18 (Reuters) - PSA Peugeot Citroen and Dongfeng Motor Group have signed a memorandum of understanding to proceed with a planned 3 billion euro ($4.1 billion) capital tie-up, a source with knowledge of the matter said on Tuesday.

The non-binding deal was signed after Peugeot's board approved the tie-up and a separate sales financing deal with Banco Santander earlier in the day, said the source, who declined to be identified ahead of a deal announcement scheduled for Wednesday. (Reporting by Laurence Frost and Gilles Guillaume; Editing by Andrew Callus)