UPDATE: Sweden's Koenigsegg Agrees To Buy GM's Saab Automobile
June 16 2009 - 4:56AM
Dow Jones News
Swedish boutique supercar maker Koenigsegg Group AB has reached
an agreement to acquire General Motors Corp.'s (GMGMQ) Saab
Automobile AB unit for an undisclosed sum, the companies said
Tuesday.
"Closing this deal represents the best chance for Saab to emerge
a stronger company," said GM Europe President Carl-Peter
Forster.
Saab, part of GM since 2000, was put up for sale earlier this
year as part of GM's efforts to return to profitability. Saab has
been loss-making for several years and has suffered an even sharper
drop in sales than the other brands being sold or closed in GM's
reorganization.
Just 783 Saab models were sold in the U.S. during May, a fall of
64% and less than the Hummer truck brand being offloaded to Chinese
investors. May sales in Europe slumped 66% to 2,191 last month,
according to data released Tuesday.
Last year, Saab sold a little less than 94,000 cars. It employs
about 3,400 workers, most at its main factory in Trollhattan in
southwestern Sweden.
Saab was granted creditor protection in Sweden Feb. 20 and GM,
also in bankruptcy protection, said it wanted to offload the unit
by the year's end. The sale, expected to close by the end of the
third quarter of this year, includes an expected $600 million
funding commitment from the European Investment Bank guaranteed by
the Swedish government, the companies said in a statement.
Additional financial support is to be provided by GM and
Koenigsegg to fund Saab's operations and program investments,
including plans to launch several new products that are in the
final stages of development, like the long-awaited revamp of Saab's
flagship 9-5 model. As part of the proposed transaction, GM will
continue to provide Saab with design and powertrain technology
during a defined time period.
"Today's announcement is great news for Saab's current and
future customers, dealers, suppliers and employees around the
globe," said Jan Ake Jonsson, managing director of Saab.
Koenigsegg, based in Angelholm, southern Sweden, was founded by
22-year-old entrepreneur Christian von Koenigsegg in 1994 to make
exclusive sports cars for the super-rich. Analysts have questioned
whether the boutique car manufacturer has the experience needed to
help Saab, but GM's Forster said Koenigsegg's ownership was the
best solution.
"Koenigsegg Group's unique combination of innovation,
entrepreneurial spirit and financial strength, combined with
Koenigsegg's proven ability to create world-class Swedish
performance cars in a highly efficient manner, made it the right
choice for Saab as well as for General Motors," said Forster.
Swedish union IF Metall welcomed the decision. "It is clearly a
different ownership solution, but it is perhaps precisely what is
needed to realize Saab's true potential. We have always insisted
that we want to see an owner who wants to and can develop Saab and
activities in Sweden, with research and development and
production," said IF Metall's Stefan Loefven.
GM itself filed for protection from its creditors earlier this
month.
Company Web site: www.saab.com
-By Ian Edmondson, Dow Jones Newswires; +46-8-5451-3094;
ian.edmondson@dowjones.com