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by Brett Davis

The Malaysian government is selling 42.7 per cent of Proton Holdings Bhd to DRB-Hicom, a Malaysian automotive manufacturer and distributor, for 1.29 billion ringgit ($400 million). The deal is set to become the largest automotive takeover in Malaysia since 2000.

Proton Holdings Bhd, also the owner of Lotus, is owned by the government through its investment holding arm Khazanah Nasional Bhd (KNBZ). How Lotus ties into the new deal is still unclear.

As for Proton, DRB-Hicom plans to develop a range of new products with the brand, including introducing new technologies such as hybrids and electric vehicles.

DRB-Hicom’s Group Managing Director Dato’ Sri Haji Mohd Khamil Jamil said in a recent statement, “DRB-Hicom and Proton have over the years accumulated a reservoir of potential waiting to be realised at the right time.

“The utmost priority for DRB-Hicom at this juncture is to put into action and realise the workable business model for Proton”. Mohd Khamil also said he aims to expand Proton’s production capacities and enhance the development of its human resources.

DRB-Hicom has been looking to buy Proton for some time now, and has been analysing Proton’s position in the market since 2009. One month ago the original founder of Proton and former Malaysian Prime Minister Mahathir Mohamad said he endorsed DRB-Hicom’s bid to purchase the company from the government.