The world's latgest bankrupt auto giant, General Motors (GM), which for seven decades had been the world's largest automaker, has finally found a suitor for its loss-making Saab Automobiles AB, which it is divesting as part of its turnaround startegy by divesting all its non-core assets.
Sweden's Koenigsegg Group AB, a consortium lead by exclusive high performance supercar marque Koenigsegg Automotive AB, has agreed to a preliminary deal yesterday to buy Saab, the troubled GM unit which filed for bankruptcy protection in February under the Swedish law.
Terms and conditions of the deal have not been disclosed, although GM said the sale would include an expected $600 million funding commitment from the European Investment Bank, guaranteed by the Swedish government.
Additionally, GM and Koenigsegg Group AB will aid Saab's operations and product development.
The acquisition is expected to be completed by the third quarter of 2009, subject to all regulatory and court approvals which will bring an end to GM's ownership of Saab for almost two decades.
GM Europe president Carl-Peter Forster said, "Saab is a highly respected automotive brand with great potential. Closing this deal represents the best chance for Saab to emerge a stronger company''
GM bought 50 per cent stake in Saab in 1989 for $600 million and took over the full ownership of the company for $125 million in 2000. Despite the efforts to make the unit profitable, Saab has been loosing money in the recent years.
The company employs 3400 people mostly in its Trollhattan plant in Sweden and has a dealership of 220 in the US.
The company sold 92,000 cars in 2008 and reported a loss of $384 million. According to Autodata Corp., Saab sales slumped 55 per cent during the first five months of 2009 compared to last year whereas GM's overall drop was 37 per cent.
Ängelholm-based Koenigsegg is a manufacturer of $1.2 million super sports cars including the CCXR – the world's first green super car running on E85 bio-fuel with a 1018 hp engine along with other models CC8S, CCR and the CCX which broke the 0-300 km/h world record by doing it in 29 sec.
The company unveiled a four-seater solar electric car, Quant, at the Geneva motor show earlier this year; it was developed jointly with NLV Solar AG, a pioneer in photovoltaics and accumulator technology.
Although the company is small compared to Saab, employing around 45 full-time highly skilled personnel, analysts believe that the combination of the two could work well. GM's ''platform and power train technology'' along with Koeningsegg's low-emission high-efficiency technology should help to augment sales volumes, analysts expect.
GM is expected to provide support for the development of Saab's 9-5 model which is to be manufactured at the Trollhattan plant along with the 9-3 model.
Saab managing director Jan Ake Jonsson said: "The proposed agreement will enable us to maximize the brand's potential through an exciting new product line-up with a distinctly Swedish character."
Earlier this month, GM revealed plans to sell its Hummer brand to China's Sichuan Tengzhong Heavy Industrial Machinery and Saturn to car dealership chain, Penske Automotive Group. (See: GM's Hummer sold to Chinese company and General Motors to sell Saturn to Penske)
In the last week of May, following hectic negotiations GM agreed to sell its Germany-based European jewel Opel to a group led by Canadian automobile parts maker Magna International (See: Opel picks Magna; job cuts loom over European plants).