After more than a year of speculation, it has emerged that Geely has agreed to purchase a 49.9% stake in Proton, according to a report by Reuters. Sources told the news agency late yesterday that the Chinese carmaker has beat out rival bidder PSA Group.
Parent company DRB-Hicom requested a suspension of trading of its shares yesterday pending an announcement. Its spokespeople could not be reached for a comment after office hours, and PSA also did not immediately return calls and messages seeking for a comment.
The search for a foreign strategic partner (FSP) commenced as part of the conditions of the government’s RM1.5 billion soft loan to the national carmaker, which was approved in April last year. Among those also rumoured to be in the running were Renault and Suzuki – the latter had signed a collaboration with Proton in 2015, which resulted in the production of the Proton Ertiga.
Geely is reportedly eyeing Proton’s Tanjung Malim plant as a base to build right-hand drive versions of its Lynk & Co 01 SUV for export to various RHD markets such as the UK and Australia. The company is also said to have plans to establish Proton as an entry-level brand within its overall structure.
In actual fact, the deal almost fell through, with Geely president An Conghui saying as recently as March that the company had backed out – coming after reports that Geely was planning to pull its bid due to DRB-Hicom’s indecision regarding the partnership. Soon after, however, it was said that the stunt was simply a negotiation tactic, with the company returning to talks after prospects with PSA became less certain.
Yesterday, it was reported that the government had extended a line of credit to Proton amounting to RM1.7 billion as a further stopgap measure before an FSP is secured. The news came after it reportedly requested between RM1.5 billion and RM1.8 billion in April to cover massive losses in its operations, as the initial amount provided in the soft loan was almost immediately used up to pay off vendors.
The company is expected to record major losses in the financial year 2017 in the midst of slowing sales, based on the RM1.426 billion net loss it reported in FY2016 ending March 31. The company sold just 24,992 vehicles in the first four months of the year, despite the launch of four new models – the Perdana, Persona, Saga and Ertiga – last year.
Meanwhile, the Financial Times has reported that Geely will also take a majority stake in Lotus of between 50% to 75% as part of the deal, according to two sources aware of the agreement. Geely is said to be looking to take advantage of the British sports car maker’s expertise in lightweight technology and composite materials, in order to help it meet strict emissions targets in China.
It is said that the company aims to bring some much-needed aid to Lotus, sales of which have fallen by 242 vehicles to 1,584 units; it has also lost £27.6 million (RM153.9 million) in the financial year ending March 31. The entire deal with Proton is subject to due diligence and final negotiations around terms such as price, said one person with knowledge of the details.
UPDATE: DRB-Hicom has announced that Zhejiang Geely will be its foreign strategic partner (FSP), with Geely acquiring a 49.9% equity stake in Proton. The deal, which is subject to regulatory and shareholder approval, will also see Geely acquire a majority stake (51%) of Lotus from Proton.
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Congratulation for both car makers..
hopefully you will beat the International market..
Geely ketuanan tersohor!
Now buying Proton = buying China car. Proton fans can only bash india cars now.
Geely will taste the Proton style:
1. Sendiri Cakap
2. Sendiri Syok
3. Sentiasa Rosak
4. Sales Carnival
5. Siapapun tak nak
6. Suka Water Fish besar dari China
Wanna buy cheap China car? Get a proton!
Finally! but why only 49%?
Still need 1/2 crutch?
Itulah, why only 49%? Thats just a donation at this point. They should have taken 51% for control to kick out the deadwood and deadbeats in proton!
large Proton Hybrid MPV for under RM80K please?
Flip flop, U Turn, Reverse, gostan gostan…
Because the deal is: Buy 1 free 1.
Terms & cond apply: have to feed old mother, give you her son.
Hopefully the Chinese can teach us how to do business. It is rather obvious that Proton does not know how to run itself.
But be warned. The Chinese from China are very hardworking. They will not tolerate lepak and tido in office or factory hours.
And they will definitely not tolerate minum teh and makan kuih lapis in the kantin 8x a day.
I hope Proton workers are ready for a paradigm shift in thinking. Don’t be like the Mat Salleh CEO who got a shock to see MAS workers sleeping during office hours and then later arguing that it was their RIGHT to do so!
Proton just assembling cars, not making or developing cars. Balik asal…
Exactly what u and ur fellow sales team needs. Jepunis style way of doing things is alredi outdated. Hardselling deathtrap junks in the internet age? And them complaining market dun take the bait even when too late install 360 camera? What about the 4 extra airbags & less fugly looks?
Deswai must work harder & smarter too. Dun be lazy and ur life will be positives. Then less rantings here.
Tongsan mari all can kawtim so no problemo.
kerja kilang is not like kerja ofis la..u want to blame? blame those at the highest ladder of proton
This report makes me feel Geli
i’m doubt our local govt corporate culture will be humble and improve. although most of us really hope proton become better and competitive…
moreover, they still keeping 51% shares. continue to act like taiko
i juz saw a report in shanghai news media about the stake buy over. it claims that proton is in bad shape over the past few years. and they took a loan of ‘150万令吉’ which is 1.5million RINGGIT from the gomen. wat?
Don’t mess with the Chinese, they’re hardworking and expect instant results.
Finally. Someone bought Proton. You will not be missed for your failed management and being a leech that continuously sucking our hard earn money from the government to bail you out.
Dont think geely can save proton. Geely itself is not a desirable brand. If money will help then billions from gov should have saved them. Perhaps Geely boys can elaborate.
Geely not desirable? How about Volvo?
What makes u think proton wl get volvo tech? Even geely which fully owns volvo only gets obsolete volvo tech.
Old Volvo tech still better than obsolete Proton tech.
Geely Holding Co. gets 100% of Volvo’s patent rights, mind you.
Truly a proud moment for rakyat. Brilliant corporate engineering, now Proton owns Volvo brand and DNA. Time to take over the world! Syabas Proton! – Faiz Roslan CEng
Wow, if Geely buy 49% into P1 means P1 owns Volvo. U must be the “best” CEng in M’sia. Faiz Roslan CEng Memang Boleh.
Bro, its geely not volvo who buy stakes in proton. At best proton wl only gets geely dna.
Wait wait wait…..was there a share swap or something? Did Proton buy a stake in Geely? Or just tembak nonsense as usual? Maybe the CEng qualification missed out on reading comprehension eh.
As others have noted – Lotus is the target here. And Geely took the majority of it. If Proton can’t turn a profit just see what Geely will take with them when they leave.
Typical UiTM bangbang.
Ini Kartun betul !
Geely bought 49% shares of Proton and should be viewed as minority share holder, Proton WILL NOT OWN ANYTHING IN GEELY.
I-Say-Man. There is a Caveat at the end of the article that says – The entire deal with Proton is subject to due diligence & final negotiations around terms such as price.
Let’s see what happen to P1 & Geely if there is indeed “A Light at the end of tunnel”.
And hope the light is not an oncoming train.
U are absolutely right asali. Wait a minute, the light is moving. Its coming nearer. OMG, its john holding a torchlight. Hehehe. Cheers bro. No joke no fun i mean no john no fun.
woo hoo, lets all rejoice, feels like merdeka all over
It has been said countless times before… Geely was eyeing Lotus from the get go… they do not really need or want Proton for that matter but just to get to Lotus… so… farewell Proton.
At least better than being handled by bunch of lazy and incompetent muds. Geely has revived the Volvo brand and is a very successful brand in China.
Better sell to PSA than to Geeli..
Nope. The lazy grp still maintain 51% share of Proton. Congratulate Lotus.
Best news of the day.tapi harge minyak naik lagi?
WOOHOOOOOOOOOO
Geely > all
Volvo > all
Lynk & co > all
And now,
Proton > all
EXCELLENT!! ABSOLUTELY BRILLIANT!!
*hellmarch.mp3*
Just hope that Geely will keep its promise to start assembling the right-hand drive version of the Lynk & Co 01 in Tanjung Malim, and not just for the controlling stake of Lotus. God knows how much we poor Malaysians have lost, wasted on this rubbish company which insists on operating it on racist principals (so much for the ketuanan bullshit). Let’s hope that the Chinese will open up the company to hire only the best people to run the company and not racists and cronies.
It could just end up as false hope for DRB still the taikoh of Proton and have more say than Geely regarding the running of Proton productions etc..
The only positive thing is Proton will have more new models based on Geely models.
Phew! finally. it is done. now we wait and see what comes out of it.
So how? Proton sold off, no more national car.
Car prices 30% cheaper boleh ditepati?
Dream on
deal includes takeover of Lotus…guess they gave it away free :D
Dr m is seriously triggered. Lol
Tahniah proton…. Ape lg… Bayo laa duit vendor… Muahahaha
Wait until P1 repots it. Too many hearsays nowadays.
WHAT!!! 49% only ah…
aiya… take 100% lah…
yeah. buy lotus, get the plant, tutup p1
How to tutup? Gomen just agree to pump in another RM 1.7B
Since you have do everything your due diligence, Good Luck Geely. Hope you know what you have got yourself into. Proton “Hardware” (Tg Malim plant) may look impressive but it’s the “Software” that you gotta worry about. Also, you forget to factor in “Gomen interference” when it comes to certain political policies, which will affect the way you wish to “restructure”.
What a shame……
The strategy could be:-
1. Using Volvo brand for the premium D-class cars.
2. Using Geely brand for China market for the SUV.
3. Using Proton brand for other A, B, C sedans and compact especially for SEA.
The Saga, Persona will be continue selling but slowly parts will be interchange with Geely’s.
Proton owner can have cheaper access to China made spare part from now on.
Part of the deal will include the Chinese company also taking control of Proton’s Norwich-based subsidiary, Lotus, with a stake of between 50 and 75 per cent.
FYI Geely does have its own models on almost every categories, more so than Proton.
why make spare part made in china when there already ecosystem available in bolehland plus importing parts attract import tax..
Initially, Geely will throw a small bone to Proton & local market. But ultimately they are more interested in the bigger Right Hand Drive market, hence the sales & manufacturing of Geely cars (using Tg Malim plant) for this market. No way will they “give away” crown jewels Volvo to Proton, this would be marketing & PR suicide. Eventually, Proton will go back to rebadge Geely cars for local sales but all exports will carry Geely badge. But Proton will still be the the local hero, so you can be proud of that.
Betul ke ni……..the Lynk & Co can sell ka?
Remember this headline on paultan.org 6 months ago?
“Lotus returns to profit, all new Elise to arrive in 2020”.
Compare it with this line from this article – “It is said that the company aims to bring some much-needed aid to Lotus, sales of which have fallen by 242 vehicles to 1,584 units; it has also lost £27.6 million (RM153.9 million) in the financial year ending March 31.”
I guess we now know the power of creative short-term accounting and good PR efforts.
Teruk benorrr dah proton nii
very disappointed news indeed, we will still see the proton branding around for a very long times then…sigh..
Soft loan 1.4 plus 1.8 equals 3.2 bil. Plus 1.
4 bil losses. Equals rm5 bil losses and bailout. Divided by 70,000 cars sold. Equals RM70,000 loss making Each car. Unfbelievable.
Sayonara Proton!
We rakyat won’t miss you the Tongsan car.
Wow.. they settled for 49%!
This is a complicated deal. It is not like selling a plate of mee goreng.
For any deal to go through there must be compromise.
Signing on the dotted lines is only the beginning. A lot of hard work have to follow to revive Proton. At least the taxpayers will not have to carry this “baby” anymore.
But majority share for Lotus. Proton is in state of sorrow now.
The best part of proton is gone.
Pet dog yapping The Edge. Can belip or not?
Do some googling to make yourself less stupid
Good, proton’ s biggest issue is the name/brand. People have developed a poor perception on the name regardless of the product.
In my opinion, Proton should ditch/change “Proton”. Now that Geely has Volvo, they should marry Volvo and Proton =VOLTRON
Voltron will bring new technologies, new perception, new confidence, and definitely new achievement.
Muruah melayu la. big big ego.
Sounds like a certain 80’s cartoon
Believe it or not, there is a 2016 Voltron animation which is quite nice.
Should have sold 100%. Keep for what.
why 49?! should have go for 51!
News flash. After 6 month of loss making and interference by DRB miss-managers, Geely pulls out and sells the proton shares back to them and take Lotus. this is what Geely wanted, they only want Lotus not that dead proton with DRB supposed to be turn around masters!!!!.
I’m excited to see what’s in store for us malaysians
Don’t you all see it?
Geely gets ONLY 49% stake in PROTON BUT 50% to 75% in LOTUS
With this,
a) PROTON gets to keep controlling stake so all top brass get to keep their jobs
b) PROTON also appears to have “kept their promise” with the Govt as they now have Foreign Strategic Partner”. Pretty sure, Govt didn’t specify how much the FRS stake needs to be.
c) With the above two done, PROTON has satisfied the govt condition and therefore gets another capital injection
d) Geely gets what they wanted, LOTUS and honestly I don’t think they give a rat ass about the Tanjung Malim plant. China labour is much cheaper and less employee protection.
So all win-win…. EXCEPT us taxpayer as the all loan to them comes from our tax money.
Agree on this. Lotus is a great loss
Exactly. I don’t understand why so many readers said Proton is taken over. It’s Lotus that taken over. The 51% controlling stake still at the hand of useless management. This is what Geely want. Who cares about the 49% stake in proton, they just simply paid as extra tips to get Lotus.
Lotus Elise t4 t5 t6 twin charged engine…
Volvo can provide lotus good engine…
Some more polestar Elise version
Sayang seribu kali sayang…By right, Proton should be the catalyst of Malaysia’s automotive industry and propel the nation towards Industrial Revolution 4.0…This is not the right path for Proton. However, maybe this is the result of poor management and work ethics, resist to change and just re-badge things to survive.
I think it was the right strategic decision for Geely and Proton. Geely have access to Europe via lotus and Asean through the Tanjong Malim plant while Proton will get EV expertise and access to huge markets in China and Asean. Will it work have to wait and see.
They already have Volvo for that. They want to enter the sportscar segment, hence the interest in Lotus.
Woah congratulation Proton! Good luck with you new endeavor.
Geely got Lotus. A few years, maybe months later Geely let go of Proton. Then Proton have nothing. Shame.
Boleh continue makan roti minum kopi goyang kaki
Am I the only one here who only cares about Proton’s new GDi engine? 1.5L turbo with a 180bhp….china v honkda meng
49% shares … later gonna have a lot of not happy news coming out then. I belief the China party want more than 50% share so they can do major change over for the company but 49% means proton will stick with their bad habits and continue to waste resources. Most likely gonna have a divorce soon.
Who’s in charge of Proton?
now proton workers have to start attend mandarin class mehhhh…
A desperate attempt by P1 to side track and divest attention from the record losses they have racked up.
WTF Lotus also raking up massive losses after boasting that sales was very encouraging.
Time to ship out the whole management & let Geely run the show. But with 49% stake looks like the same jokers will be retained.
PSA is happy they are out of this mess.