Chinese automaker Geely has agreed to buy struggling Malaysian manufacturer Proton from DRB-Hicom, sources said this week, beating out rival bidder PSA Group.
Zhejiang Geely Holding Group, which controls Hong Kong-based Geely Automobile and Sweden's Volvo Car Group, will acquire 49 per cent of Proton, the sources said. Proton also controls British sports-car maker Lotus.
DRB-Hicom earlier asked for trading in its shares to be suspended pending an announcement.
Proton, founded in 1983 by former Malaysian prime minister Mahathir Mohamad, received 1.5 billion ringgit (Bt12 billion) in government aid last year on condition that it pursue a turnaround plan and seek a foreign partner.
Other potential bidders have included PSA, the Paris-based maker of Peugeot and Citroen cars, its domestic rival Renault and Japan's Suzuki Motor Corp.
Proton rebadges cars from foreign manufacturers to sell in the Malaysian market, but its quality has declined in recent years. The company has two Malaysian plants with an annual capacity of 400,000 cars, currently running far below maximum output.
An earlier attempt this year to woo new partners for Proton foundered on the Malaysian government's refusal to allow foreign bidders to acquire control.
Geely's investment would help Proton grow its sales overseas and recover some of the global presence it has lost in recent years, people familiar with the bidding process told Reuters in February.
By offering some of its own technology, Geely hopes to lift Proton's sales in right-hand-drive markets including Malaysia, the United Kingdom, India and Australia, they said.
The success of midsize Geely models such as the GC9 sedan and Boyue sport utility vehicle helped to grow the brand's China sales by 50 per cent last year to 765,851 vehicles, Reuters reported.