SAIC Motor Corp and Nanjing Automobile Group have agreed in principle on a tie-up under which Nanjing Auto would own no more than 10% of SAIC, two sources close to the talks told a news agency on Wednesday.

Under the deal, MG owner Nanjing Auto would fold its vehicle and parts operations into Shanghai-based SAIC in exchange for a stake in SAIC, the unidentified sources told Reuters.

The news agency was told a binding agreement is expected to be signed by the end of this month after senior executives of the two companies met to work out details last week.