DRB-Hicom: Proton Bidders Complete Due Diligence; Decision Within H1 2017

Suitors for Proton have completed their due-diligence of the company over the past weeks ahead of potential bids for a controlling stake expected soon, the company’s current owners DRB-Hicom Bhd have confirmed.

DRB-Hicom is currently waiting for the said parties, yet to be officially disclosed but reported to include China-based Geely Automobile Holdings and France’s PSA Group, to submit their bids. DRB-Hicom also reaffirms its commitment to finalize its selection of a foreign partner for Proton within the first half of 2017.

 “The entry of a foreign strategic partner will enable Proton to revitalize itself through access to new platforms, powertrains, and technologies which will further improve Proton’s range of products and its quality,” said DRB-Hicom Bhd’s Group Managing Director Dato’ Seri Syed Faisal Albar.

Faisal also reaffirms that whilst DRB-Hicom is ready to offload a majority stake in Proton, it remains committed to revive the brand’s fortunes and is thus keen to find a right foreign strategic partner that will be critical to accomplishing that goal.

"There are a few criteria that we are looking at. First, we ask ourselves whether or not there is a strategic fit [between the two car makers]; and then whether or not there is operational fit, and cultural fit. These three things are quite key to DRB-Hicom and Proton," said Faisal in September 2016.

Elaborating on the three aforementioned criteria, Faisal explains that a good strategic fit will ensure Proton achieves competitive economies of scale domestically and also ensure that Proton cars grow strongly within the ASEAN markets and subsequently beyond.

From Proton, Faisal explains that the eventual foreign partner will have access to Proton’s current range of models and unused capacity of the Tg Malim plant. The foreign partner will also have access to Proton’s in-house R&D team as well as chassis tuning expertise of Lotus Cars UK.

“It is important to point out that DRB-Hicom’s search for a foreign strategic partner for Proton is a critical exercise to ensure the sustainability of the national car maker.

“We have stated before that we will maintain a significant equity in Proton, and this has not changed. The foreign strategic partner search is not about shirking our national responsibility but about enhancing Proton as a bona-fide car maker, and eventually putting them, and Malaysia on the global map,” Faisal said.

DRB-Hicom is also keen to protect the interests of Proton’s current network of vendors. On this point, Faisal emphasized that “DRB-Hicom shall also assess the intention of the potential partners in utilizing the current ‘home-grown’ vendor network. This is a very significant element in our evaluation, as DRB-Hicom who also own subsidiaries serving Proton as vendors, would avoid for these ‘home-grown’ network to be diluted substantially.”

“DRB-Hicom is confident that with the right foreign strategic partner, Proton will enhance its brand equity and can again be a successful carmaker as it was in the 1980s and 1990s,” Faisal added.

Related: Geely – Fridge-maker To Car-maker In Just 12 Years, Who Are They?