GM strikes deal to sell Saab brand to Spyker

January 26, 2010

GM strikes deal to sell Saab brand to Spyker

By TIM HIGGINS
FREE PRESS BUSINESS WRITER

General Motors reached a deal today to sell its Saab operations to the carmaker Spyker Cars NV, keeping the Swedish brand alive.

Under the deal, GM gets $74 million in cash and $326 million in preferred shares of Saab, which will represent less than 1% of the voting rights, according to Netherlands-based Spyker.
 

“We are very much looking forward to being part of the next chapter in Saab’s illustrious history. Saab is an iconic brand that we are honored to shepherd,” Spyker CEO Victor Muller said in a statement today.
 

The deal marks a victory for GM after attempts to sell Saturn and Opel fell apart at the last moments.
 

GM is winding down Saturn and Pontiac and has a tentative deal to sell Hummer as it focuses on Chevrolet, Cadillac, Buick and GMC in the United States. Opel is in the process of being restructured.
 

Just weeks ago, Saab’s fate looked similar to Saturn. A deal to sell to Koenigsegg Group AB fell apart in November after an initial agreement was reached in June. Then last-minute negotiations with Spyker were interrupted by GM’s announcement in December that it would wind down Saab. Despite that, the two sides continued to talk.
 

“Throughout the negotiations, GM has always had the hope to find a solution for Saab that would avoid a wind down of the brand,” Nick Reilly, GM Europe president, said in a statement.

Ed Whitacre, GM CEO and chairman, at one point said selling Saab would be “real easy. Just show up with the money and you can have it. Nobody’s come with the money.”
 

While the deal gives GM some cash and helps the Detroit automaker focus on the four U.S. brands it is keeping, Jessica Caldwell, a senior analyst with Edmunds.com, expressed some doubts about the deal. “Saab represents competition for GM’s Opel brand, and Saab’s new owner will likely work hard to make the investment pay off, which may make Saab that much more competitive in the long run,” she said in a note.
 

The deal, which is subject to governmental approvals, is expected to close in mid-February, according to a GM statement.
 

Sweden’s Industry Minister Maud Olofsson said the government has agreed to guarantee up to $550 million in loans through the European Investment bank to make the deal work.
 

John Smith, GM vice president for corporate planning and alliances, said GM would continue providing powertrains to Saab for an extended period along with finished 9-4X crossovers and transitional engineering services. He didn’t say how long those agreements would last.
 

About 3,400 people work for Saab. There are 218 Saab dealerships in the United States
 

Spyker issued a statement saying it plans to change its name to Saab Spyker Automobiles. The acquisition will mean more than a name change for Spyker, which isn’t profitable and only made 21 cars during the first half of 2009, according to its most recent public filings.

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