Naza, DRB-HICOM to buy Proton?

MalaysiaKini quotes financial weekly The Edge in reporting two proposals to buy over government investment arm Khazanah Nasional’s 42.7 percent stake in Proton. These proposals are said to be from Naza and DRB-HICOM. MalaysiaKini’s article also says Sime Darby Berhad’s CEO Ahmad Zubir Murshid told The Edge that Sime Darby also had submitted such a proposal a long time ago but no further details have been revealed.

I don’t have a copy of this week’s The Edge, so this is pretty much all the details I have on the issue. But such a news will surely trigger a query from Bursa Malaysia, so let’s wait for DRB-HICOM’s response on the issue. Previously DRB-HICOM responded to a Bursa Malaysia query on a similiar report by BizWeek titled “DRB-HICOM steers towards Proton” on 12th August 2006 with a statement denying any talks or negotiations with any Proton Holdings Berhad shareholders regarding a purchase of stake.

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Paul Tan

After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history.

 

Comments

  • clutch_plate (Member) on Sep 05, 2006 at 12:43 am

    Hmm.. as long as this step can save our national company, what can be said?

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  • outspoken (Member) on Sep 05, 2006 at 1:19 am

    merger is not a matter of "if", its a matter of "when". Perodua/proton merge might be a long shot, but sharing resources and utilising current capabilities is a sure way forward. DRB, Proton, Sime all have their own share in the automotive industry, so why not?? It might be a case of win-win situation..

    I doubt that Perodua is willing to do any merger since they are doing well right now..

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  • intermilan (Member) on Sep 05, 2006 at 1:21 am

    that bad ahh?

    they'll never release the rakyat from potong nightmare..

    now want to get new executive producer for this nightmare.

    no buy out please.. dont let this nightmare become a recurring one.

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  • pirate (Member) on Sep 05, 2006 at 1:23 am

    Hmmm….

    gotta get this latest copy from my bro! ;)

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  • Monchichi (Member) on Sep 05, 2006 at 1:32 am

    Just curious…why Potong drop VW and looking merger with NAZA / HICOM ? Potong CEO think again about VW, HOW ?

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  • raybrig85 (Member) on Sep 05, 2006 at 2:41 am

    haha..

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  • whatsoever (Member) on Sep 05, 2006 at 2:49 am

    1st Naza buy proton

    2nd Naza get peugot/china/VW engine

    3rd france/china/jerman made car is national car…

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  • bobdbilder (Member) on Sep 05, 2006 at 2:50 am

    I luv the Edge coz its a bit more of a thinker's tabloid…hehe

    When we talk about mergers, the point of consolidation of market players is the case. However, this is not a merger when Sime or DRB is involved. Its aquisition. In this case, there are possibilities to cut off fats i.e. redundant positions. Basically manager and above are affected. In the Proton CEO there is a possibility of this happening. I mention months before that the new CEO was selected due to his experience in brokering the purchase of Perodua by Toyota. The marriage happened and I say P2 is no longer a national car company with majority by Toyota and Mitsui Investment arm having more share than locals.

    I would say with the low price of Proton shares, this would be the optimal time for a buyout. But since Khazanah doesnt freaking care about share values, it would take more time and lower Proton share prices.

    Also the guy in DRB Automotive is also ex Perodua. Makes sense doesnt it? If true, Go buy Proton shares cos its so freaking cheap right now.

    Now here is the conspiracy theory; what about GM doing a due diligence on DRB? Must be a bad report card (to be expected). IF DRB buys Proton, that would mean better report card.

    Note; Bob does not hold any shares in the auto sector nor is he an investment analyst.

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  • quest (Member) on Sep 05, 2006 at 4:33 am

    Merger involves 2 mutually beneficial companies to draw in each other competitive advantage. From my stand point as a non car manafaturer or manafacturing experience, I see no synergy between any of these co.s.

    It's not a matter of whether P1 can be save at whatever costs, it smells suspiciously like forcing the other 2 co.s to take over Proton, with strings attached.

    Whatever happens, we (consumers) ultimately pay the price.

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  • e-nabilll (Member) on Sep 05, 2006 at 4:56 am

    for heavens sake…i dont think proton need any local buyer..please..we need a foriegner who has experience in this….locally we dont have a properly qualified person or group that knows to run a complicated company like proton..wat on earth naza brings to proton?rebadged kia cars under proton??cmon…DRB hicom car division actually made a loss last yr….jus bcos those two have money doesnt mean thy can solve problems…we need a proper company buying a stake in proton…and atleast share the management 50/50…

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  • szw (Member) on Sep 05, 2006 at 4:57 am

    i think proton been taken over by vw is way better den naza .

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  • Joe Ooi (Member) on Sep 05, 2006 at 5:02 am

    bobdbilder said, "Now here is the conspiracy theory; what about GM doing a due diligence on DRB? Must be a bad report card (to be expected). IF DRB buys Proton, that would mean better report card.

    Note; Bob does not hold any shares in the auto sector nor is he an investment analyst."

    Luckily you put in "exclusion clause" at the end of your comment! To the best of my knowledge, GM never or do not have any intention to buy DRB Group but do due diligent to one of DRB subsidiary distributing Chevrolet cars! That all.

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  • tango5 (Member) on Sep 05, 2006 at 5:08 am

    Bob,

    I'm a bit dizzy reading you post, but I do like your analysis. You sure you are not one of those share broker on the loose? :)

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  • malayman (Member) on Sep 05, 2006 at 5:49 am

    hmm…. dunno la..but if this happens would proton end up like another rebadger like naza? and about VW taking over proton..i dont think those guys give a damn about the malaysian car company…probably they will just turn it into a launcing pad for their cars in this region. what proton needs is some sort of vision and a they got to find a niche somewhere like what perodua has done. it is not a matter of who buys it over but a matter of what they sell and wether we want to buy it.. i think once that is figured out then protons problems have been settled….now who has those brains to solve it?

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  • SamGan (Member) on Sep 05, 2006 at 5:50 am

    For goodness sake, it's not a merger, it's a buyout of Khazanah's 42% share in Proton with controlling stake. Proton in private hands and treated like a real business may have a better chance of succeeding.

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  • jzkzlz (Member) on Sep 05, 2006 at 6:14 am

    yeah, proton must be treated in business way, not in politics way.. otherwise, proton will be go away…

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  • Monchichi (Member) on Sep 05, 2006 at 6:49 am

    No more GLCs`. Let those thing to professional and play at market rules.

    Bravo VW!!!

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  • hiuzi_eriena (Member) on Sep 05, 2006 at 7:04 am

    As aspected, good luck. Hope cheaper and better.

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  • V8 (Member) on Sep 05, 2006 at 7:08 am

    'no way!'-thats what Dr. M will probably say..*

    *in my opinion.

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  • accordmania (Member) on Sep 05, 2006 at 7:19 am

    who buys who also same to me…all still focus on money(own pocket) instead of new technology and sefety aspect of "malaysian's car". very dissapointed

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  • jzkzlz (Member) on Sep 05, 2006 at 7:33 am

    Yeah, very disappointed, as well as their QC.

    My cousin new Saga already got oil leaking at the crank shaft seal, and rear shock absorber oil leaking. the car only travelled 16000km, 8 months old…..

    Very sad….

    Will these improve if they are merging??

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  • hameed koyakuti (Member) on Sep 05, 2006 at 8:22 am

    Hmmm, cant be. Im opposing if its going to happen.

    1 – Do, remember DRB is the previous owner of Proton. It will look funny if they regain control.

    2 – New product development fund will swallow DRB's cash reserves.

    3 – No manufacturing expertise

    The best way for Proton to move forward is a merger with Honda, BMW or VW or get a reputable foreigner/expat with credible management style ( specialist in auto industrie )

    Our local automan isnt good enuff or credible enuff, whether he comes from UMW toyota, Perodua & Honda Malaysia, Sime Hyundai etc. They didnt call the shots, they are just managing the company. Most of the critical decision is done by the Japs. Furthermore, they r just an assembler, nothing much of an experience. They just assemble whats being told to assemble. But to produce a car/model, it needs a lot of forcasting, marketing stgy, segmentation, simulation, instinct etc. Thats where we, Malaysians edged out.

    Hehehe, just a tot. Dont bash me.

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  • asimo (Member) on Sep 05, 2006 at 9:06 am

    i think better joe oii buy the share….he always keep talking..so maybe we can hope something from u joe oii….prove it…

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  • w_lighter (Member) on Sep 05, 2006 at 4:55 pm

    Just curious…why Potong drop VW and looking merger with NAZA / HICOM ? Potong CEO think again about VW, HOW ?

    ————————————————————————————————————

    The deal went down coz Khazanah Nasional dont want to sell controling state to WV. And WV dont want to invest in something they cant control. And Khazanah Nasional says they will never sell P1 to foreign company. Or is it non bumi company ?… i cant recall…

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  • bobdbuilder (Member) on Sep 05, 2006 at 5:38 pm

    I wonder what Naza n DRB-HICOM can contribute in terms of auto expertise especially in design and manufacturing works. They are no better than Proton themselves in these areas. It seems that Proton is here to stay in Malaysia whether u like it or not. Cheap cars won't be available in bolehland as long as Proton is in local hand.

    Cheers to all car buyers!!!!! U can keep on dreaming until the cow comes as new car price won't drop any further.

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  • mycar_stolen (Member) on Sep 05, 2006 at 5:40 pm

    Proton decision usually done by their vendor/politician cum businessman more than Mr MD.

    if we think that if Proton consider as an Asian chick courting with ang moh the VW guys. Will it be for real thta the Asian chick will say no to the ang moh with money? unless the chick is retarded..and yes Proton is a very sick company.

    Proton never play their role as a national car make but why do MSIAN need to support them..22 years is enough…

    say no to proton…proton jijik

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  • SatriaGuy (Member) on Sep 05, 2006 at 6:46 pm

    I hope some cash-rich company buy Proton and inject some needed boost into the company and its value but for God's sake let it be anyone but NAZA.

    As much as I admire the company's super high-speed progress into car manufacturing in Malaysia, we know that they are in it only for the glory and quick buck of one rich family, not in the interest of all of us.

    So, yes, will some rich corporation buy the 42% stake? bcoz if not, they will…aarrghh!

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  • Ralliace (Member) on Sep 05, 2006 at 6:50 pm

    I guess Naza has a better idea of car production and the business that comes along with it. They recently found a cheaper alternative to produce their cars in India. Naza maybe "younger" when compared to Proton but undoubtly they have proved success. Furthermore, Naza would not be afraid to tie up with foreign manufacturers, after all they have tied up with Kia and recently Peugeot which has proven as an upward gradiant in their learning curve.

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  • pw (Member) on Sep 05, 2006 at 7:05 pm

    Make a consortium consisting of all local assemblers. Private companies in malaysia owning Potong. Treat potong as a private business. 1st focus on making the cars locally affordable and of high quality befitting the price. Keep locals consumer happy with the cars 1st. Otherwise whoever take over will also face the same problem and potong will go down the drain… quality comes 1st before politics.

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  • REDDEVIL (Member) on Sep 05, 2006 at 8:07 pm

    Why not Petronas taking over Proton? I think Petronas is most suitable and well qualified, they are financially strong and have the expertise in engine development. Sure they can produce a good car with their experience in f1 racing. Maybe BMW can offer some kind of technology transfer to Proton.. hehe…

    DRB-HICOM & Naza are only assembler, they know nothing about automobile except assembling cars.

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  • mycar_stolen (Member) on Sep 05, 2006 at 8:24 pm

    Proton is really a spoil brat.No more new Proton registration…4.1% per annum…compulsery down payment..10%..epf socso,ea,all documents needed..then just forget it…it is actually you already in trouble when you visit Proton showroom…

    JUST TAKE PROTON FROM YOUR BUYING LIST.

    delete Proton please…driving Proton demolish your self esteem

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  • carlover69 (Member) on Sep 05, 2006 at 8:47 pm

    haiya, after 20 over years, plotong still going no where..

    give it another 20 years, i think plotong would still be going no where….

    better for plotong to "TA PAU" or partner with reputable foreign car maker…

    without plotong, I think Malaysia still BOLEH…………!!!!!!!!!

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  • maibatsu_thunder (Member) on Sep 05, 2006 at 9:54 pm

    Funny how people use words like 'assembler' and 'rebadger', what do those words mean actually? Are Peroduas rebadged Daihatsus and Toyotas?

    In terms of manufacturing, has Malaysia made it's own simple 1 cylinder motorcycle? No need to be so ambitious, even Spanish level like Bultaco, Ossa, etc. OK Maybe Modenas you say, but aren't those rebadged Kawasakis? The Modenas GP bike, I was reading was engineered by TWR.

    So how lah?

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  • quest (Member) on Sep 05, 2006 at 11:04 pm

    SamGan said,

    September 4, 2006 @ 9:50 pm

    For goodness sake, it’s not a merger, it’s a buyout of Khazanah’s 42% share in Proton with controlling stake. Proton in private hands and treated like a real business may have a better chance of succeeding.

    Actually, the idea behind running Proton as a business seems sound, BUT be realistic la. it'll never happen. It'll still be controlled by g'ment and still a propaganda tool. So there won't be any advantage..

    And they have no synergy anyway.

    Volkswagon would've been different, there would be actual transfer of tech and distinct QC. Even if they don't give new technology, they give outdated ones also miles better than our current tech la.

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  • Xoomie (Member) on Sep 06, 2006 at 12:40 am

    Who says Proton is going nowhere? Proton is going down.. what !!

    And that's a wrong direction

    *clap clap*

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  • fookeatmin1989 (Member) on Sep 06, 2006 at 1:04 am

    The most foolish thing they think is to reject VW's offering for a stake in Proton…..

    Why bother about so called 'national pride' when your inferior quality car will affect your 'national pride' in anyway……………….

    DRB-Hicom or Sime Darby…whoever win……we lose!!!!$%#$%!@$!%@#^

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  • topgunthang (Member) on Sep 06, 2006 at 4:47 am

    who the hell would want to buy up proton at this point unless they can influence the NAP in some way that benefits proton.

    must be pretty optimistic.

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  • handsfree (Member) on Sep 06, 2006 at 5:18 am

    hu guys…

    i support most of yr ideals…

    i think.. what Proton need is a real car maker with latest technologies….

    WV is no. 1 option to me..

    MIT no. 2…..

    NAZA is a better company if compared to Proton.. but NAZA is tooo young to take this shit… by taking this.. NAZA might fall in RED RED RED.. might not able to get up again…..

    DBR-Hicom is a good company… but still too many emotional factors within…

    hence…. foreign partner is BEST.. look at

    SEAT – keep it name…

    AUDI – remain it own character….

    Skoda – still Russian…..

    now we are talking about cost n profit and also… THOUSAND OF MALAYAISAN IS WORKING IN THAT PROTON PLANT…

    not forgetting the supliers… (of coz some real suppliers some NOT…)

    well…. Proton… put yr FINAL betting…

    good luck… me still support MALAYSIAN PRODUCT.. even yr heart is not made by malaysian

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  • Joe Ooi (Member) on Sep 06, 2006 at 7:20 am

    asimo said, "i think better joe oii buy the share….he always keep talking..so maybe we can hope something from u joe oii….prove it…"

    Aiya, still type my name wrongly, even Indon "equivalent spelling" for surename Ooi" is Oei. Talk about buy the P1 share @ 42% no money unless get tax payer allocation! if buy P1 share equivalent to RM 1 K, got money, but I won't dump even RM 0.01 to Proton share, I better donate RM 1K to Indonesia's Tsunami victims. You want to buy? Your money is up to you ……..

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  • KingKong (Member) on Sep 06, 2006 at 9:57 am

    Monchichi,

    Proton never drop VW but the problem VW actually drop Proton because of the AP issue. Autostadt managed to get the AP for VW, but not Proton.

    That is why Dr.M so angry at Rafidah.

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  • KingKong (Member) on Sep 06, 2006 at 9:59 am

    i hope Perodua will also send their proposal to take-over Proton.

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  • pekan (Member) on Sep 06, 2006 at 8:48 pm

    word has it that the DRBHicom assembly plant in Pekan will be moved to Tg. Malim. Currently Proton's assembly plant is only running about 40% of it capacity. This move would utilize the full potential of Proton's assembly capacity.

    Currently, DRBHicom in Pekan among others, consist of MTB (assembling Hicom Perkasa, Mitsubishi light duty trucks & Mercedez Benz cars & trucks) and AMM (assembling Naza Sutera, Pregio, etc) will be sold to interested companies (Daimler Chrysler & NAZA ?).

    The current construction rate in Bertam seem to strengthens this assumption.

    Tg Malim, here we come..!

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  • Whopper (Member) on Sep 06, 2006 at 10:25 pm

    handsfree,

    Skoda aint from Russia, its from the Ceska Republika :-)

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  • oranglulu (Member) on Sep 07, 2006 at 1:26 am

    CHANGE THE SOUP BUT NEVER CHANGE THE MEDICINE,back to square one lahhh!dun be stubborn lah,all others are joining hand with expertise manufacturer,look at china,india,thailand,indonesia etc,etc,continued will lead us to eventually closed down,still a lot of malaysian jobless,give VW a knock,knock,opens our door,invite the telents and progress,or we the rakyat of malaysia will continued to get low quality,antiq,out of date and fashion,expensive,automobil!!!!!!!,joke is scrap a 15 years old iswara to buy a new iswara! only can happens in bolihland.

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  • waimak (Member) on Sep 07, 2006 at 1:28 am

    Doesnt matter who's taking over the company so long it is for the good of the company and business. Of course they have to maintain the inspiration/ concept/ identity or whatever. And those with the majority stakes should have the expertise and take the lead lah!

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  • Joe Ooi (Member) on Sep 07, 2006 at 7:36 am

    Ask these importer, assembler and/or distributor of foreign car to team up to buy P1 – not a sensible move!

    Why don't ask P1's freaking power window vendor to be one of the party to submit proposal to take over P1?

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  • bobdbilder (Member) on Sep 07, 2006 at 7:35 pm

    There are always hangups with GLCs of which Proton is one. It would be interesting to note their KPIs and what they are based on. People would not make such statements if their KPIs were good or on target.

    If the aquisition happens, it would be good. Change is good. The hangups with GLC is that they lose focus on producing value to the shareholders. They are too much concerned on image, butt kicking and ass licking. The senior managers are too senior with Datukships in mind. These are the fats that need to be trimmed or rather; liposucked.

    We need real business people to run the show and get the right people to back them up.

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  • sloth (Member) on Sep 08, 2006 at 5:59 am

    REDDEVIL said,

    September 5, 2006 @ 12:07 pm

    Why not Petronas taking over Proton? I think Petronas is most suitable and well qualified, they are financially strong and have the expertise in engine development. Sure they can produce a good car with their experience in f1 racing. Maybe BMW can offer some kind of technology transfer to Proton.. hehe…

    ————————————————————-

    RED,

    Petronas used to be major shareholder of Proton but then sold off to KN (in exchange to Putrajaya Holdings shares if I'm not mistaken).

    Petronas management banyak pandai laa.. who need extra headache?

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  • topgunthang (Member) on Sep 08, 2006 at 7:11 am

    take a look at what proton is competing against in the international market. Decide for yourself if u think proton has a chance.

    look at that website and scroll down to the list of entry vehicles and pricing.
    http://carsguide.news.com.au/story/0,20384,203653…

    look where savvy stands and how it competes.

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  • bobdbilder (Member) on Sep 19, 2006 at 7:18 pm

    Have a look at today's news; GM plans to buy DRB Hicom. 51% stake. I guess that due diligence report card was good anyway with an optimistic future of controlling stake in Proton!

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