It's Finally Happening: China's Geely Is Buying Control Of Lotus
25 May 2017 - Carbuzz
For months we’ve been hearing rumors regarding the possible sale of Lotus to a couple of interested buyers.
Today we've learned that China's Geely has sealed a deal with Lotus parent company Proton to purchase a controlling stake in the famous sports car company. Proton is currently owned by DRB-Hicom. The new deal, which won't be finalized until late July, will see Geely purchase a 51 percent stake in Lotus. Geely also owns Volvo, Lynk & Co as well as its own brands.
We previously reported that Geely wasn't the only company interested in Lotus. France's PSA Group, owner of Peugeot and Citroen, was also considering a bid, but it appears Geely made the better offer. Purchasing Malaysian-based Proton is also a smart move for Geely due to the former's two production plants that have a capacity to build 350,000 cars annually. Proton also more recently expanded into Southeast Asia, which is also attractive to Geely. What does Lotus offer Geely? First off, there's the prestige factor. Second, is Lotus Engineering, which Geely could find great use for in a number of ways. How is this good for Lotus? Simple, financial stability.
Lotus has for years suffered financial hardships, and Geely's cash flow will more than keep the lights on at Hethel. Lotus will also enjoy Geely's business approach, which is described as being hands-off. There was controversy when Geely purchased Volvo from Ford a few years ago, but the subsequent hands-off approach is paying huge dividends today. Lotus will be hoping to replicate that success.