The Chinese company has agreed to buy the stake in the loss-making Proton from its parent company DRB-Hicom. As well as a controlling share of Proton, Geely will buy a 51% majority stake in British sports car firm Lotus. DRB-Hicom will retain 50.1% of Proton and will look to sell its remaining stake in Lotus. The definitive agreement is expected to be completed in July.
Proton has owned a majority stake in Lotus, based near Norwich, since 1996. Lotus turned a profit for the first time in its history late last year.
The deal will give Proton access to Geely's powertrains and platforms, while giving Geely increased access to the South East Asian market. In a statement, Geely said the deal will also allow synergies in research and development, manufacturing and market presence. The agreement comes following a long string of speculation, rumours and denials. The PSA Group had also been in the running to buy Proton.
Donghui Li, the executive vice-president of Geely Holding Group, said: “With Proton and Lotus joining the Geely Group portfolio of brands we strengthen our global footprint and develop a beachhead in South East Asia.
“Geely Holding is full of confidence for the future of Proton. We will fully respect the brand’s history and culture to restore Proton to its former glory with the support of Geely’s innovative technology and management resources.
“Reflecting our experience accumulated through Volvo Cars' revitalisation, we also aim to unleash the full potential of Lotus Cars and bring it into a new phase of development by expanding and accelerating the rolling out of new products and technologies.”