Proton nears deal with Volkswagen (VW)

Updated by seantang on Thurs 7 June 2007 4pm: More sandiwara ahead.

Volkswagen Denies Report It Will Buy Control of New Proton Unit
By Chad Thomas and Angus Whitley

June 7 (Bloomberg) -- Volkswagen AG, Europe's largest carmaker, denied a report it will probably buy a controlling stake in a unit holding the assets of Malaysian carmaker Proton Holdings Bhd.

``This report is definitely wrong and only rumor without substance,'' said Andreas Meurer, a Volkswagen spokesman, in a phone interview today. ``We will have a round of talks soon.''

The Edge Financial Daily in Malaysia said today Volkswagen may buy a 51 percent stake in a newly formed unit that will own Proton's manufacturing, research and development and engineering divisions.

To contact the reporters on this story: Chad Thomas in Berlin at cthomas16@bloomberg.net ; Angus Whitley in Kuala Lumpur at awhitley1@bloomberg.net

Last Updated: June 7, 2007 01:45 EDT

Original blogpost:
Is this for real? Would the UMNOputras pulling the strings, really give up management and equity control of Proton? Would VW buy into Proton when it will not control the sales channel? Or will VW setup an independent, competing sales channel, much like EON in the old days?

Malaysia's Proton nears deal with Volkswagen-paper
Wed Jun 6, 2007 9:48pm ET

KUALA LUMPUR, June 7 (Reuters) - Tie-up talks between troubled Malaysian carmaker Proton and Volkswagen are nearing conclusion, with the German firm likely to take management and equity control of key Proton operations, a Malaysian newspaper reported on Thursday.

Quoting unidentified sources, the Edge financial daily said Volkswagen was likely to take a 51 percent stake in a new company into which would be injected Proton's key motor assets, such as manufacturing, research and development, and engineering.

Loss-making, state-controlled Proton would hold the remaining 49 percent and continue to keep ownership of distribution arm Proton Edar, the paper added.

Malaysian conglomerate Sime Darby could take over a 43 percent stake in Proton held by state investment arm Khazanah, the paper said.

A Proton spokeswoman declined to comment while Sime Darby officials could not be reached.

Details are expected to be finalised at a meeting in New York being held between representatives of Khazanah, Sime Darby, Volkswagen and the office of Malaysian Prime Minister Abdullah Ahmad Badawi, the Edge said.

Key Malaysians involved in the talks are in New York as part of a roadshow organised by a Malaysian stockbroker for U.S. investors, it said.