Study on Proton-Perodua merger completed

newsdesk@thesundaily.com
KUALA LUMPUR (March 21, 2011): The study on the proposed merger of Proton Holdings Bhd (Proton) and Perusahaan Automobil Kedua Sdn Bhd (Perodua) has been completed, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said.
It has been presented to the economic council meeting chaired by Prime Minister Datuk Seri Najib Abdul Razak in the middle of January this year, he told Khairy Jamaluddin (BN-Rembau).
The government has decided for the ministry, through the Malaysia Automotive Institute, to have further discussions with both parties to reach a consensus in ensuring the country’s automotive industry would become more competitive.
“Both companies have presented their merger proposals to their respective board of directors and their views have been submitted to the ministry.
“At the moment, the government was looking into the feedback received from the two companies,” Mustapa said to Khairy who asked for the outcome of the study conducted by the ministry.
Mustapa said the economic council has agreed for the merger to be done in a progressive way whereby at the early stage, both companies would identify strategic fields which can be explored towards enhancing their capacity usage and competitiveness.
Khairy in his supplementary question asked whether Daihatsu, a shareholder of Perodua, was one of the obstacles faced in the initiative.
“The merger was seen as not benefiting Perodua being the leader in the local market,” Khairy suggested.
Mustapa said it was not fair to make such a claim at the moment because the government has yet to make a final decision and the process was still on going.
“I have met the top management of the two companies. It is too early to say who are the obstacles. What matters is they have agreed to its concept. It is just that there were some details which they disputed,” he added.
To another supplementary question from Dr Dzulkefly Ahmad (PAS-Kuala Selangor) on the capability of the merger to help generate economy of scale, Mustapa said the merger is important to maintain or increase their local market share.
“For now they are doing okay. But for the future, if nothing is done, or business as usual, or without something radical, we are not convinced they would be able to survive the competition in the open market,” he said.