Khazanah to sell stake in car maker Proton to DRB-Hicom for $411.9 mn

Malaysian sovereign wealth fund Khazanah Nasional Bhd is selling its 42.7-per cent stake in domestic car maker Proton Holdings Bhd to conglomerate DRB-Hicom for $411.9 million.

In a statement today, Khazanah said the decision was made following due deliberation and detailed evaluation of various proposals in order to bring the national auto maker to the next level of strategic growth in line with the industrial development of the national automotive sector.

"Upon completion of the sale and purchase agreement, DRB-Hicom will be obliged to undertake a mandatory general offer on the remaining Proton shares," Khazanah said in the statement.

Proton, Malaysia's biggest automaker takeover since 2000, was founded in 1983 by Malaysia's former Prime Minister Mahathir Mohamad.

Proton has been struggling to increase its domestic market share and is seeking a joint venture with global car makers to boost sales. The carmaker exported around 20,000 vehicles last year.

Its net profit fell to RM15.5 million in the second quarter last year compared to RM65.9 million for the period of its previous financial year.

Selangor-based DRB-Hicom, owned by Syed Mokhtar, Malaysia's second-youngest billionaire, manufactures, distributes and assembles various types of vehicles for global carmakers like Volkswagen, Suzuki, Daimler and Mercedes-Benz.

The acquisition will give DRB-Hicom control of two Malaysian car plants with the capacity to make a combined 350,000 vehicles per year.