PSA calls supervisory board meeting for Tuesday for possible FCA deal review - sources

By Gilles Guillaume

PARIS (Reuters) - French carmaker PSA <PEUP.PA> could discuss a merger deal with rival Fiat Chrysler <FCHA.MI> at a meeting of its supervisory board it has called for Tuesday, two sources familiar with the situation told Reuters on Thursday.

Peugeot SA - the maker of Peugeot and Citroen - and Fiat Chrysler (FCA) are finalising talks after they announced in October a plan for a $50 billion (£38.97 billion) tie-up that would create the world's fourth-largest automaker.

The sources said a planned Memorandum of Understanding between the two groups could be presented to the PSA board at Tuesday's meeting, but one of the sources also said details were not yet finalized and discussions were still ongoing.

A PSA spokesman declined to comment.

A third source close to the matter said the two groups were working to sign a deal before Christmas, possibly by the end of next week.

Both FCA and PSA have said they are confident of reaching a merger deal by year-end.

FCA Chairman John Elkann said last month, when a shock lawsuit from General Motors <GM.N> emerged, that it did not worry him and he was confident of signing a deal with PSA by the end of this year.

(Additional reporting by Giulio Piovaccari in Milan; writing by Giulio Piovaccari and Geert De Clercq; Editing by Elaine Hardcastle)