Chinese conglomerate Geely will purchase 51 percent of Lotus in a deal that promises to accelerate the growth of the U.K. sports car maker. Geely is also buyinga 49.9-percent stake in Proton, Lotus' struggling parent company.
The deal will expand and accelerate the rollout of new products and technologies for Lotus, Geely CFO Daniel Donghui Li said in a statement. It should also help Malaysian automaker Proton, which has been struggling for a whilerebadging cars from foreign automakers and selling them in the local market. Some experts say an investment could revivesales and lead to a much-needed improvement in quality.
"The agreement lays the foundation for a wider framework for both Geely Holding, Proton and Lotus to explore joint synergies in areas such as research and development, manufacturing and market presence," Geely said in a statement.
Geely has owned Volvosince 2010 and is expected to share the fruits of that partnership with Proton. Proton could gain access to some of the latest technologies developed by the pair, including Volvo's scalable platforms. The resourcescould come in handy as Lotus prepares to introduce its first SUV by 2019.
The parties are expected to sign a final agreement in July. Geely did not indicate the valuation of the deal.
Once finalized, the deal will end a long road of negotiations for Proton and Lotus. In total, Proton had 15 suitors, including French automaker PSA Group that would later go on to buy GM's European business.
Source: Automotive News (Subscription required)