Zhejiang Geely buys Proton, Lotus stakes for RM1bil

KUALA LUMPUR: DRB-Hicom Bhd and Zhejiang Geely Holdings Group have signed the final agreement, which sees the latter acquiring 49.99% of car manufacturer Proton and 51% of luxury sports car brand Lotus in a deal worth RM1bil.

Zhejiang Geely is buying the Proton stake for RM460.30mil, of which RM170mil is cash and the remaining RM290m will be in form of a transfer of the former's sports utility vehicle (SUV) platform Boyue for RM290mil.

The next step will see Proton venturing into the SUV market through the rebadging and later the development of its own SUV under the platform.

As for the Lotus stake, Zhejiang Geely will be paying 100mil pound sterling (RM540mil) to Proton for the 51% stake.

Prime Minister Datuk Seri Najib Tun Razak said on Friday that the signing of agreement cements the new beginning of strategic partnership between both companies.

''Following this strategic partnership, Proton will have the ability and resources to turn itself around and become an example of Malaysian success.

"Geely is a company with the right credentials and proven track record. I believe Geely has the ability and expertise to take Proton to new levels of success,'' said Najib.

Among those present to witness the signing were Chinese Ambassador to Malaysia Huang Huikang, Minister of Finance II Datuk Seri Johari Abdul Ghani, Second Minister of International Trade Datuk Seri Ong Ka Chuan, Prime Minister’s Special Envoy to China Tan Sri Ong Ka Ting, chairman of Zhejiang Geely Holding Group Li Shufu, president of Zhejiang Geely Holding Group An Conghui, and managing director of DRB-Hicom Datuk Seri Syed Faisal.

“The acquisition is expected to be completed in three months, after which Zhejiang Geely will form a core management team recruited from a pool of global candidates to ensure the smooth operation of Proton,” both companies said in a joint statement.