PSA and Dongfeng agree on deal outline, report says

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PARIS (Reuters) -- PSA/Peugeot Citroen and Dongfeng Motor Group have agreed on the main terms of an alliance backed by a 3 billion- to 4 billion-euro ($4.1 billion to $5.5 billion) capital injection for the French carmaker, the Financial Times reported.

PSA and Dongfeng are in talks to build on their existing Chinese joint venture with cooperation in other markets and a multibillion-euro share issue that would see Dongfeng and the French government acquire stakes in the French carmaker, sources familiar with the matter have said.

According to the Financial Times report, which cited anonymous sources, the two carmakers are planning joint production of small cars for Southeast Asian markets, underpinned by a transfer of unspecified technologies.

PSA had no immediate comment on the report, which was published by the newspaper today.

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