Geely Drops Proton Bid

Zhejiang Geely Holding Group Co. has withdrawn its bid to purchase Malaysia’s struggling Proton Holdings Bhd, Geely President An Conghui tells South China Morning Post.

An didn’t give a reason for the decision. But earlier this month Geely threatened to drop out because of indecision by current owner DRB-Hicom Bhd over terms of the deal.

Geely’s departure leaves PSA Group as the sole bidder for Proton, which also owns U.K. performance carmaker Group Lotus. Like Geely, PSA reportedly wants management control of the company. DRB has indicated it intends to remain a “substantial shareholder” in Proton.

Proton’s market share in Malaysia has plunged to 15% from a high of about 70% in the 1980s. The carmaker is seeking a strategic partner by this summer under terms of last year's 1.5 billion ringgit ($385 million) bailout loan from the Malaysian government.

A new owner would gain access to Proton’s underutilized Tanjung Malim assembly plant, which has an annual production capacity of 150,000 vehicles. The acquisition also would qualify the buyer to export vehicles tax-free from Malaysia to the other nine member countries in the Association of Southeast Asian Nations.