Geely, the Hong Kong car company that owns Volvo, is acquiring control of British car company Lotus.

Geely is purchasing a 51-percent stake in Lotus from struggling Malaysian car company Proton, and a 49.9 percent stake in Proton itself. Etika Automotive will gain the other 49 percent of Lotus.

France's PSA Group and Japan's Suzuki had apparently also been interested in acquiring Proton.

Geely says it plans to revive both Proton and Lotus.

"The agreement lays the foundation for a wider framework for both Geely Holding, Proton and Lotus to explore joint synergies in areas such as research and development, manufacturing and market presence," Geely said in a news release.

Those joint synergies will be highlighted by the lightweight chassis technology Lotus is known for, which could help Geely improve fuel efficiency.

Geely CFO Daniel Donghui Li said the company aims to "unleash the full potential of Lotus Cars" by expanding and accelerating new products and technologies.

Proton was nationally held but was privatized in 2007 to Malaysian conglomerate DRB-Hicom, which is owned by tycoon Syed Mokhtar Al-Bukhary. It was supposed to be the flagship for Malaysia's economic development.Though it owns two factories, Proton mainly rebadges foreign-made cars and sells them in Malaysia. What it has, what Geely presumably wants, is a distribution network in Southeast Asia to pit Chinese cars against Japanese automotive dominance in the region.

Retaining a 50.1-percent stake in Proton is seen as a face-saving move.

"Proton will always remain a national car and a source of pride, as Proton will still have a majority hold of 50.1 percent," Malaysian finance official Johari Abdul Ghani said. "Our very own much-loved brand now has a real chance in making a comeback, a huge one I hope."


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