Geely, owner of Volvo, will take control of Lotus and a 49.9% stake in Malaysian car company Proton.

The Chinese car giant has agreed to buy the stake in the loss-making Proton from it's parent company DRB-Hicom. As well as a controlling share of Proton, Geely will buy a 51% majority stake in British-based Lotus. DRB-Hicom will retain 50.1% of Proton, and will look to sell its remaining stake in Lotus. The definitive agreement is expected to be completed in July.

Proton has owned a majority stake in Lotus, based near Norwich, since 1996. Lotus turned a profit for the first time in its history late last year.

The deal will give Proton access to Geely's powertains and platforms, while giving Geely increased access to South East Asia. In a statement, Geely said the deal will also allow synergies in research and development, manufacturing and market presence. The agreement comes following a long string of speculation, rumours and denials. The PSA Group had also been in the running to buy Proton.

Daniel Donghui Li, the executive vice-president of Geely Holding Group, said: “With Proton and Lotus joining the Geely Group portfolio of brands we strengthen our global footprint and develop a beachhead in South East Asia.

“Geely Holding is full of confidence for the future of Proton. We will fully respect the brand’s history and culture to restore Proton to its former glory with the support of Geely’s innovative technology and management resources.

“Reflecting our experience accumulated through Volvo Car’s revitalisation, we also aim to unleash the full potential of Lotus Cars and bring it into a new phase of development by expanding and accelerating the rolling out of new products and technologies.”

DRB-Hicon’s group managing director, Syed Faisal Albar, said: “Our intention was always to ensure the revitalisation of the Proton nameplate. This deal will be the catalyst to elevate a brand that Malaysians resonate with.”

Geely was founded in the Zhejiang province of China in 1986, originally as a refrigerator manufacturer. The firm's expansion into automotive products began with motorbikes, before it started producing cars in 2002. Geely Automobiles has a major presence in the Chinese car market, with the firm expanding internationally after buying Volvo from Ford in 2010. Geely also purchased The London Taxi Company in 2012.