G.M. Sells Saab to Swedish Automaker

General Motors announced Tuesday that it had reached a tentative agreement to sell its Swedish unit, Saab Automobile, to a consortium led by the sports car maker Koenigsegg Automotive.

The companies said they had signed a memorandum of understanding, contingent on $600 million of financing from the European Investment Bank that is to be guaranteed by the Swedish government. They did not release further financial details, but Saab has said it would need about $1 billion to upgrade its operations. The deal is expected to close in the third quarter of this year.

Saab, which has a narrow, though loyal, customer base focused on Sweden, Britain and the American Northeast, sold just 93,000 cars last year, too little to lure the world’s big automakers, many of which are sniffing out potential tie-ups to increase their scale of production. Koenigsegg, an unlisted company of just 45 employees based in Angelholm, Sweden, turns out just a few “super cars” — high-performance sports cars costing more than $1 million each — per year.

“I’m struggling to see the point of this deal,” said Philippe Houchois, head of European auto industry research at UBS in London. “Is it to ensure the survival of Saab, to save jobs? It looks like a short-term solution that doesn’t resolve the core issues.”

With its American parent in deep trouble and the Swedish government taking a hard line, Saab filed for restructuring Feb. 20, a move that effectively separated the two companies. General Motors itself sought protection from creditors in a New York bankruptcy court on June 1.

The G.M. filing did not include its European operations, which also include the British brand Vauxhall and Opel, which it is pooling under the Adam Opel unit in Germany. G.M. will retain a 35 percent stake in Adam Opel, which is being sold to Magna International, a Canadian auto parts maker, and Sberbank, a Russian lender, with support from the German government.

In addition to Saab and Opel, G.M. is selling or eliminating three other brands. About two weeks ago, G.M. reached a preliminary agreement for the sale of Hummer to a machinery company in western China, Sichuan Tengzhong Heavy Industrial Machinery Company. Last week, G.M. agreed to sell Saturn to the Penske Automotive Group, whose chairman is Roger Penske, 72, one of the nation’s biggest automobile dealers. It also plans to eliminate the Pontiac brand in 2010.

“This is yet another significant step in the reinvention of G.M. and its European operations,” the G.M. Europe president, Carl-Peter Forster, said in the statement. “Saab is a highly respected automotive brand with great potential. Closing this deal represents the best chance for Saab to emerge a stronger company.”

G.M. will provide Saab with some parts and technology, and Saab will produce its new 9-5 models in the Saab production facility in Trollhattan, Sweden, as opposed to the Rüsselsheim, Germany plant where it now makes the car. G.M. and Koenigsegg will jointly fund the rollout of some products in the pipeline.

Jan Ake Jonsson, managing director of Saab automobile, hailed the deal in the statement as “great news for Saab’s current and future customers, dealers, suppliers and employees around the globe.”

source: nytimes