Petronas buys Proton stake

KUALA LUMPUR, Malaysia (AP): Malaysia's state oil and gas monopoly has agreed to pay 1 billion ringgit (US$263 million) to become the biggest shareholder in the national car company started by Prime Minister Mahathir Mohamad.

Petroliam Nasional, or Petronas, signed the agreement late Friday and said it would pay cash for the 27.2 percent stake in the Proton car corporation at 7 ringgit (US$1.8) per share.

Petronas, which bought the stake from Hicom Holdings, said the deal would place Proton in a stronger position to compete in the rapidly consolidating global auto industry.

"The strategic deal will allow Petronas and Proton ... to further accelerate the integrated development of Malaysia's automotive industry," Petronas said in a statement.

Petronas and Proton currently have a joint venture to research engine and fuel technology, although the deal is subject to approvals from Hicom shareholders and relevant authorities, the statement said.