China's Geely Automobile Holdings Ltd has acquired a 49.9 percent stake in national carmaker Proton Holdings Bhd from government-linked company DRB-Hicom Bhd.
Geely will also acquire a 51 percent in British spotscar brand Group Lotus Plc, which is a fully-owned subsidiary of Proton Holdings. The balance would be acquired by little-known Etika Automobile Sdn Bhd.
Both parties are expected to sign a Definitive Agreement in July.
DRB-Hicom, controlled by tycoon Syed Mokhtar al-Bukhary, had been instructed to find a strategic partner for Proton Holdings as part of a condition for a RM1.5 billion government softloan last year.
"Our intention was always to ensure the revitalisation of the Proton nameplate. It was Malaysia's first national car brand and has more than 30 years of history.
"This deal will be the catalyst to elevate a brand that Malaysians resonate with," DRB-Hicom group managing director Syed Faisal Albar said.
Geely Holdings, one of China's leading carmakers, owns the Volvo Car Corporation and The London Taxi Company.
DRM-Hicom said that the deal will allow Proton Holdings to tap into Geely Holding's vast range of platforms and powertrains. In turn, the deal will allow Proton Holdings access to Geely Holding's existing markets.
Geely: We'll respect Proton's history
Geely Holdings would also have access to Proton's research and development unit and have a manufacturing presence in the region.
According to Bernama, Geely Holding Group executive vice president and chief finance official Daniel Donghui Li said his company fully respects Proton's brand history and culture.
He said Proton would be restored to his former glory with the support of Geely's innovative technology and management resources.
"With Proton and Lotus joining the Geely Group portfolio of brands, we have strengthened our global foot print and developed a beach head in South East Asia.
"We also aim to unleash the full potential of Lotus Cars and bring it into a new phase of development, thanks to our experience accumulated through Volvo Car's revitalisation," said Li.- Mkini
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