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.