General Motors to sell Saturn to Penske

06 June 2009

General Motors (GM), the bankrupt US auto giant, yesterday signed an agreement with the world's second largest car dealership chain, Penske Automotive Group, to sell its Saturn brand.

The deal could keep alive GM's 350 exclusive Saturn dealerships nationwide and protect 13,000 jobs. GM's 51 Canadian dealerships, are not included in the deal.

The deal is the second in a row this week by GM in an effort to hive-off unprofitable and non-core assets of the company, which filed for bankruptcy on 1 June. (See: General Motors files for bankruptcy protection).

After several weeks of hectic discussion in various capitals of Europe and across the Atlantic, Canadian automobile parts maker Magna International and Russian bank bought majority stake in GM's Germany based Opel. (See: Opel picks Magna; job cuts loom over European plants). 

It is expected that the Saturn deal would be concluded in the third quarter. Although details of the terms have not been divulged, analysts believe that the price is likely to be in the range of $100 million to $200 million.

Through the deal Penske will get the rights for the Saturn brand and its five different models. GM would continue to produce its top-selling models Aura, Vue and Outlook SUVs on contract basis up to 2011. Production of the other two models, Sky and Astra will be stopped by GM.