Under the deal, Geely would also buy 51% of Proton-owned sports carmaker Lotus and inject RM170.3 million into the joint venture while licensing Proton to manufacture Geely's SUV model Boyue.
"The key is to make Proton and Lotus sustainable brands moving forward, if both DRB-HICOM and Geely can capture the window of opportunities presented, and we believe, it will translate to economic benefits in the future". We hope that through our cooperation with DRB-Hicom, Proton will be transformed into the number one independent automobile brand in Malaysia and one of the top three in southeast Asia.
"He would still prefer Proton to be 100% Malaysian owned and lose hundreds of millions of ringgit a year", Najib said, referring indirectly to Dr Mahathir Mohamad, who started Proton in 1983 during his second year as prime minister.
Geely today signed a definitive agreement to acquire the 49.9% stake in Proton.
Geely would also consider producing Lotus cars in China, he said.
The signing was inked between Geely Auto Group president and CEO An Conghui and DRB-Hicom Group managing director Syed Faisal Albar at the Grand Hyatt, Kuala Lumpur.
"The acquisition is by no means a physical integration of assets but rather a collaboration to move forward the Proton and Lotus brands", Li Shufu, Geely's chairman, told a press conference.
London Stock Exchange Group Plc
Gamco Invsts Inc Et Al stated it has 0.27% of its portfolio in Paragon Group of Companies PLC (LON:PAG). Ashtead Group plc has an average rating of "Buy" and a consensus target price of GBX 1,706.69 ($21.74).
"The revival of Proton and Lotus will not be an easy task in a market with fierce competition".
Among them were that Proton would be given the exclusive rights of Geely's products and latest technology to the region, and access market beyond the SEA and China, he said.
The Chinese automaker said earlier the Proton deal would strengthen its global footprint and develop a beachhead in Southeast Asia. The government has long resisted efforts to sell off any key stake in Proton, seen as a national icon.
"With Geely making Proton their right hand-drive hub for the ASEAN region, Proton can now target the huge ASEAN passenger vehicle market for both our existing models and Geely's models".
It has struggled in recent years and last year received 1.5 billion ringgit in government aid on the condition it pursues a turnaround plan and seeks a foreign partner.
Malaysia wants Proton to win back lost market share and get a stronger foothold in the region's 3.2-million-car market.
Comments