China's Dongfeng Motor Group Co said on Wednesday it will invest 800 million euros ($1.1 billion) in French carmaker Peugeot SA via a share sale and rights issue while France's government does the same, confirming a Reuters report.

Peugeot, Dongfeng and the French government signed a non-binding outline agreement on the deal on Tuesday, two sources with knowledge of the matter told Reuters.

In a filing to the Hong Kong Stock Exchange, Dongfeng said it had entered into a non-binding accord with Peugeot to strengthen cooperation in technology, research and development, manufacturing and overseas distribution.

Trading in Dongfeng's shares, which was suspended on Tuesday, will resume on Wednesday.

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