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Volvo and Lotus are about to join forces

Lotus Exige S
Lotus Exige S

(Lotus Exige.Lotus Cars)

The Chinese owner of Volvo Cars just took a controlling stake in British sports car maker Lotus.

It bought 51% of Lotus from Malaysian automaker Proton Holdings. It's also buying 49.9% of Proton itself.

With Lotus, Geely is gaining one of the most famous brands in the automotive industry, as well as decades worth of engineering and racing expertise missing from its current portfolio. For Lotus, Geely could be the financial savior the venerable sports car maker has been so desperately seeking.

The deal also marks a major expansion into Southeast Asia — a highly competitive market dominated by Japanese automakers. Under the guidance of billionaire Li Shufu, Geely has expanded its global reach considerably over the past decade and now operates 16 production facilities, seven design studios along with five R&D Centers.

Geely also owns the London Taxi Company. The financial terms of both deals have not been disclosed.

Proton, founded in 1983, has struggled to survive as an independent automaker so Geely's also being seen as a savior for the Malaysian brand.

"Proton will always remain a national car and a source of pride, as Proton will still have a majority holding of 50.1 percent," Malaysia's Second Finance Minister Johari Abdul Ghani said at a news conference to announce the deal Reuters reported. "Our very own much-loved brand now has a real chance in making a comeback, a huge one I hope."

Proton has held a majority stake in Lotus Cars since 1996.

According to Reuters, the deal is expected to be finalized by July.

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