It appears the new Saab 9-5 has been given a reprieve, as part of a sale to Spyker.
A last-minute reprieve has saved the long-struggling Saab, the Swedish brand parent General Motors was in the process of “winding down.”
The purchaser is the unlikely Dutch luxury sports car manufacturer, Spyker, which sees the acquisition as a way to expand its own global distribution base.
(This story is revised from the original as more details emerged.)
In return for $74 million in cash, and $326 million in preferred stock redeemable after 2013, GM will be free of Saab. (A senior GM officials hinted at a “third component” of the deal, but declined to provide details.) Meanwhile, Spyker has received a $550 million loan from the European Investment Bank to fund the venture.
Swedish government officials gave their quick sign-off to the deal, which included the providing of guarantees for the EIB deal. Assuming quick action on the few remaining issues, the transaction is expected to close in mid-February, about one year after Saab filed for bankruptcy.
“General Motors, Spyker Cars, and the Swedish government worked very hard and creatively for a deal that would secure a sustainable future for this unique and iconic brand, and we’re all happy for the positive outcome,” said John Smith, GM’s vice president for corporate planning and alliances.
Following the sale, the new parent plans to combine its existing operations with those of its new subsidiary to form Saab Spyker Automobiles. The deal comes as a real cliff-hanger for Saab, one of four brands GM decided to abandon as part of its bankruptcy court-ordered restructuring. An earlier deal, which would have seen Saab sold to the supercar maker Konigsegg, collapsed when the Swedish maker couldn’t come up with funding. Stryker stepped in soon afterwards but initially ran into the same problem.
(Of the four brands GM planned to give up, Pontiac was the only one slated to close. But after a failed bit by Detroit entrepreneur Roger Penske, GM decided to close Saturn, as well. A sale of Hummer to a small Chinese manufacturer is pending, and final word on that deal should come by the end of this month.)
As recently as a day before Spyker completed the acquisition, GM CEO Ed Whitacre had insisted the U.S. maker would continue the “wind down” of Saab, which started with the dissolution of its board of directors, earlier this month. Saab recently restarted production, but that was expected to continue only through January 29th, with an aim to complete existing customer orders. Now, said GM’s Smith, a top priority will be working out a plan to keep Saab’s lines going.
An all-new version of the flagship 9-5 has received initially favorable reviews, one reason, said Smith, to believe Saab is “sustainable.” The automaker also has a new crossover, the 9-4X, which is produced by GM for the Swedish marque. Under the agreement with Spyker, GM will continue producing the 9-4X, as well as powertrain components for other Saab models. And the Swedish company will continue to use GM for engineering support for an indefinite period going forward.
Considering this ongoing business relationship, concluded Smith, “of course we want a strong Saab.”