PARIS, Feb 12 (Reuters) - PSA Peugeot Citroen has reached an outline deal with Dongfeng Motor Group and France to raise up to 4 billion euros ($5.5 billion) in fresh capital and deepen cooperation with the Chinese carmaker, sources familiar with the matter said.
The agreement in principle will be presented to the Peugeot board on Feb. 18 and likely signed as a non-binding memorandum of understanding the same day, according to three sources with direct knowledge of the situation.
The accompanying industrial plan will see Peugeot and Dongfeng retain and expand their existing joint venture, adding research and development capability with a view to expanding into South East Asian markets, the sources said.
Peugeot declined to comment on the deal talks with Dongfeng. The Chinese carmaker, based in Wuhan, could not be reached for comment after hours. ($1 = 0.7312 euros) (Reporting by Sophie Sassard, Laurence Frost and Gilles Guillaume; editing by Keiron Henderson)