Geely Holdings has signed a memorandum to take control of Lotus and 49.9% of Proton.

DRB-HICOM Berhad (DRB-HICOM) has reached an agreement with China-based Zhejiang Geely Holding Group Co.,Ltd (GeelyHolding) for the Chinese car group to acquire 49.9% equity in PROTON Holdings Berhad. DRB-HICOM currently owns 100% of the manufacturer of the first national car. The two parties signed the agreement in Putrajaya today, witnessed by YB Datuk Seri Johari Abdul Ghani, the Minister of Finance II.

The deal will enable PROTON to tap into Geely Holding’s vast range of platforms and power trains, and will also enable PROTON to have access to existing markets of the Chinese carmaker, as well as right-hand drive markets in south-east Asia.

DRB-HICOM Group Managing Director, Dato’ Sri Syed Faisal Albar says the PROTON brand will remain present and will grow significantly with the new foreign strategic partner on board.

“Our intention was always to ensure the revitalization of the PROTON nameplate. It was Malaysia’s first national car brand and has more than 30 years of history. This deal will be the catalyst to elevate a brand that Malaysians resonate with,” said Syed Faisal.

The deal will also see PROTON sell its entire equity in British carmaker Lotus, which will see the Group exit the sports car segment.Geely Holdings, which also owns Volvo Car Corporation and The London Taxi Company, is one of the leading passenger vehicle carmakers in China. It already has facilities across the globe, including 16 manufacturing plants, 7 design studios and 5 research & development centres.

The deal with PROTON will offer Geely access into the key ASEAN market, and also R&D and manufacturing presence in the region.

Both parties expect to sign the Definitive Agreement in July 2017.