DRB-Hicom Berhad to pay RM 1.29 billion for 42.7% of Proton

DRB-Hicom Berhad to pay RM 1.29 billion for 42.7% of Proton

Malaysian conglomerate DRB-Hicom Berhad said Monday it will buy national carmaker Proton in a 3 billion ringgit ($957 million) deal that could help revive Proton’s flagging fortunes.

DRB-Hicom said it would pay 1.29 billion ringgit ($412 million) for government investment arm Khazanah Nasional’s 43 percent stake in Proton. It will then make an offer for all Proton shares it doesn’t own at 5.50 ringgit ($1.80) a share. Analysts said this would bring the total deal to around 3 billion ringgit.

Khazanah said the share sale would help put Proton on a more competitive footing. Analysts said it could help turnaround the struggling carmaker, which has failed in recent years to seal tie-ups with foreign carmakers including Volkswagen AG due to the government’s insistence on maintaining control over a high profile local company.

DRB-Hicom, controlled by billionaire tycoon Syed Mokhtar Al-Bukhary, distributes and assembles vehicles for Volkswagen, Daimler AG’s Mercedes-Benz and Honda Motor Co. The group is also involved in banking, services and property sectors.

“It’s a fair deal. It bodes well and will open new doors for Proton,” said Ahmad Maghfur, analyst with OSK Research.

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