DRB-Hicom takes over Proton
The latest buzz going around in the Malaysian automotive market is that Khazanah Nasional, who holds a 42.74% stake in national carmaker Proton Holdings Berhad has sold its stake to DRB-Hicom Bhd.
This will be done through a conditional sale which will amount to RM1.291 billion at RM5.50 per share. Khazanah is the investment arm belonging to the Malaysian government and it announced that the decision was made after all factors have been considered and detailed evaluation has been carried out. This will allow more expansion to take place for Proton where DRB-Hicom, which is one of the major automotive conglomerates in the country would be poised to offer the next level of strategic growth in the national carmaker company.
Hicom, if you recall is the original manager of Proton when it was first envisioned and then subsequently launched under the purview of the then prime minister Tun Dr Mahathir Mohamad. Tan Sri Mokhtar al-Bukhary is said to have a stake in DRB-Hicom where the company stated that they will maintain the company’s direction and intention and safeguard the national car identity and brand image. The move is seen as being very positive strategically although some analysts have been sceptical about it. This is mainly because it might create a conflict of interest where DRB-Hicom carries other automotive brands and might cause the Proton brand to fall short of its focus. Furthermore, DRB-Hicom’s financial standings are not as strong as many would believe.