China’s Geely to own 49.9 pct of Proton

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The Geely Automobile Holdings logo is pictured at the Auto China 2016 auto show in Beijing, China. — Reuters photo

KUCHING: DRB-Hicom Bhd (DRB-Hicom) has reached an agreement with China-based Zhejiang Geely Holding Group Co Ltd (Geely) for the Chinese car group to acquire 49.9 per cent equity in Proton Holdings Bhd (Proton).

 

DRB-Hicom currently owns 100 per cent of the manufacturer of the first national car. The two parties signed the agreement in Putrajaya yesterday, witnessed by Datuk Seri Johari Abdul Ghani, the Second Minister of Finance.

The deal will enable Proton to tap into Geely’s vast range of platforms and powertrains, and will also enable Proton to have access to existing markets of the Chinese carmaker, as well as right-hand drive markets in South East Asia.

DRB-Hicom group managing director, Datuk Sri Syed Faisal Albar says the Proton brand will remain present and will grow significantly with the new foreign strategic partner on board.

“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,” said Syed Faisal in a statement.

Geely Group executive vice president and chief financial officer Daniel Donghui Li said Geely will fully respect the brand history and culture to restore Proton to its former glory with the support of Geely’s innovative technology and management resources.

“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,” Li added.

The deal will also see Proton sell its entire equity in British carmaker Lotus to Geely Holding, which will see the group exit the sports car segment.

Geely Holdings, which also owns Volvo Car Corporation and The London Taxi Company, is one of the leading passenger vehicle carmakers in China.

It has facilities across the globe including 16 manufacturing plants, seven design studios, and five research & development centres.

The deal with Proton will offer Geely access into the key Asean market, and also R&D and manufacturing presence in the region.

Both parties expect to sign the Definitive Agreement in July this year.