Peugeot, Dongfeng sign capital tie-up plan - source

PARIS (Reuters) - PSA Peugeot Citroen and Dongfeng Motor Group <0489.HK> have signed a memorandum of understanding to proceed with a planned 3 billion euro (2.4 billion pounds) 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)