MILAN, Dec 17 (Reuters) - The board of French carmaker PSA , which owns Peugeot, approved a binding memorandum of understanding to merge with rival Fiat Chrysler, a source close to the matter said on Tuesday.
A separate board of Fiat Chrysler (FCA) was underway to discuss finalising an initial agreement for a $50 billion merger to create the world's number four carmaker, the source added.
PSA declined to comment. FCA was not immediately available for comment.
Reporting by Gianluca Semeraro, writing by Giulio Piovaccari, editing by Silvia Aloisi