49% of Malaysian automaker to change hands, but Lotus may be primary target.
After steady negotiations and a year of speculation, a report has emerged that Malaysian automaker PROTON is on the cusp of an acquisition by Chinese conglomerate Geely, beating out other potential partners like PSA Group, Renault, and Suzuki.
DRB-Hicom, the parent company of the loss-making marque, suspended trading of its shares yesterday, as is the norm preceding an announcement of this nature. According to a Reuters report, sources close to the Chinese company spoke to the agency and confirmed that it had won the bid for PROTON. The Malaysian carmaker has been on the hunt for a foreign strategic partner ‘FSP’ since April 2016, as part of the conditions stipulated in a soft-loan provided by the Malaysian government.
We reached out to PROTON for comment, but have not yet returned our request.
Geely’s motives for the PROTON takeover are pretty clear: The latter maintains enormous production facilities just outside the capital city, that are presently under-utilised. The strategic location of PROTON’s Tanjung Malim production facility means cars made there can be easily moved to major ports for shipping; This would be a target for Geely’s emerging brand Lynk & Co., which is in need of a facility capable of manufacturing right-hand drive versions of its cars, which will then be shipped globally. PROTON itself will also sit as an entry-level brand within the Geely stable, which also includes Volvo on the top end.
There are also rumours that the deal with PROTON may include the sale, or majority takeover, of British sports car specialists Lotus, which PROTON bought over in 1996. A report from the Financial Times speculates that Geely is targeting to take over 50%-75% of the Norfolk company, which will allow Geely to capitalise on Lotus’ expertise and experience in utilising lightweight technology and composite materials, which will aid the Chinese conglomerate meet continually-tightening emissions regulations around the world.
We will bring you updates as they come, so stay tuned.