GM Europe
June 17, 2009
The deal is set to be finalized by the end of the third quarter, and is expected to include $600 million in financing from the European Investment Bank, guaranteed by the Swedish government. GM Europe said the plan included several new Saab products that are in the final stages of development.
Saab was put up for sale by General Motors at the end of last year and has been under bankruptcy protection since February. Saab has asked creditors to write off 75 percent of its debt of $1.4 billion – most of which is owed to GM.
The deal to sell off Saab comes after the successful bid by Canadian-Austrian auto components maker Magna to take over Opel, one of GM's other European subsidiaries.
Unlikely partnership
At first glance, the partnership between Saab and Koenigsegg seems to make sense: two Swedish brands; both producers of luxury vehicles.
Koenigsegg produces some of the world's most exclusive supercars, with models that would not look out of place in a James Bond action sequence. Saab on the other hand – while also considered a maker of luxury vehicles – caters more to the 'safety first' demographic.
However, analysts are concerned that the Koenigsegg founder, Christian von Koenigsegg, does not have enough experience to run a large company like Saab. Koenigsegg's production numbers are minuscule compared to those of Saab: last year Saab made more than 93,000 cars. Koenigsegg made around 20.
Swedish Economics Minister Maud Olofsson said the government is not sure how "financially strong" Koenigsegg is.
The Swedish government said it would make a decision on guaranteeing credit for the deal after it has examined the buyer and the proposal.
Author: ca/AP/dpa/Reuters
Editor: Mark Hallam