According to two sources, China’s Dongfeng Motor will have a reduced stake of 4.5% in the new group following the merger of PSA with Fiat Chrysler.

The board of both groups have approved a binding memorandum of understanding for a $50 billion merger.

Dongfeng’s 12.2% equity stake in PSA has come down significantly; its preliminary agreement, which was announced in October, would have had amounted to around 6% stake in the combined entity with FCA.

Dongfeng did not response to requests for comments.

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Tags: acquisition, binding, China, Chinese, Dongfeng Motor, equity stake, Fiat Chrysler, M&A, Memorandum of Understanding, merger, merger and acquisition, MOU, Peugeot, PSA, reduced stake