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Koenigsegg buys Saab: confirmed

Koenigsegg buys Saab: confirmed

Published: 16 Jun 2009 11:45 GMT+02:00
Updated: 16 Jun 2009 11:45 GMT+02:00

Saab Automobile is to be sold to Swedish sports car maker Koenigsegg, Saab has confirmed.

US automaker General Motors has signed a tentative agreement with Koenigsegg to sell its beleaguered unit, GM said in a statement on Tuesday.

"General Motors Corp. and Koenigsegg Group AB, a consortium led by Koenigsegg Automotive AB, today confirmed the details of a memorandum of understanding for the purchase of Saab Automobile AB that secures Saab's future," GM said.

The Swedish company has been undergoing a legal reorganisation process since February 20th.

Koenigsegg, founded in 1994 by Swedish businessman Christian von Koenigsegg, has just 45 employees and produces 18 high-end sports cars a year for more than a €1 million ($1.4 million) each.

"Koenigseggs 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 General Motors," GM Europe President Carl-Peter Forster said in a statement.

"Closing this deal represents the best chance for Saab to emerge a stronger company," he said.

The sale, which is expected to close by the end of the third quarter, includes an expected 600 million dollar funding commitment from the European Investment Bank, guaranteed by the Swedish government.

"Additional support is to be provided by GM and Koenigsegg Group to fund Saab's operations and product programme investments," GM said.

The Saab automaker -- not to be confused with a Swedish defence company also called Saab -- sold 93,000 cars worldwide in 2008, according to its website.

It owes 9.7 billion kronor ($1.3 billion) to GM -- its largest individual creditor -- as well as 347 million kronor to the Swedish government. Other creditors are owed 647 million kronor.

Saab Automobile employs about 3,400 people in Sweden, and some 12,000 other jobs in the country are dependent on Saab through suppliers.

Commentators in Sweden have questioned whether Koenigsegg would have the financial muscle or industrial know-how to run Saab.

The company is backed by a Norwegian financial tycoon, Bård Eker, whose holding company Eker Group holds a 49 percent stake in the niche sportscar maker.

Eker told Norwegian media at the weekend that "several investors" were backing his bid to buy Saab, but would not disclose their names.

The Swedish government had in recent months refused to follow Washington's lead in bailing out its automakers Saab and Ford-owned Volvo Cars over fears the money would end up in the pockets of the US parent companies.

In a sign that a sale was imminent, Stockholm announced last week that it had authorised the Swedish Debt Office, which acts as the state's bank, to discuss guaranteeing a loan made to Saab by the European Investment Bank.

Sweden's government had in recent months refused to follow Washington's lead in bailing out its automakers Saab and Ford-owned Volvo Cars over fears the money would end up in the pockets of the US parent companies.

Swedish Enterprise Minister Maud Olofsson welcomed Tuesday's news, saying it put an end to months of uncertainty about Saab's future.

"It is good that Saab's ownership issue is now settled. This is an announcement that the company's employees, Trollhättan, the Västra Götaland region and the government have all been waiting for," she said in a statement.

The head of the IF Metall metal workers' union, Stefan Löfvén, said meanwhile the deal was "clearly a different ownership solution."

"But perhaps that is just what is needed to exploit the hidden values within Saab. We have all along said that we want to see an owner who wants to and who can develop Saab and its operations in Sweden with research and development as well as production," he added.

GM bought 50 percent of Saab Automobile from Saab-Scania in 1990, snapping up the rest of the company a decade later.

The car unit posted a 2008 net loss of 3 billion kronor ($241 million), as sales dwindled due to an ageing product line and a collapse in demand as credit lines tightened.

It last made a profit in 2001, the only year it was in the black in almost two decades of GM ownership.

AFP/The Local (news@thelocal.se)

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Your comments about this article

11:40 June 16, 2009 by gobstopper
I've been looking forward to changing my beloved 9/5 after the new model comes out.

It's just dawned on me that it will be made in Germany. What's the point? I might as well switch to BMW or Merc.
12:11 June 16, 2009 by xky
Congratulations to Saab!
13:13 June 16, 2009 by markac
#1 "gobstopper" you are behind the times, the new 9-5 will be built at Trollhattan not Rüsselsheim. Congratulations to all at Saab.
13:30 June 16, 2009 by justanotherexpat
Excellent news! And I'm so glad I bought my latest Saab just before the prices go up, now that there's a secure future. This means that the next time I buy one (in about 5 years' time), it'll be cool as ****!
13:38 June 16, 2009 by JonnyDee
Nice to see a Swedish company back in Sweden, now if the government would just give it's employers who choose to stay in Sweden a tax break, that would make even more come back.
14:39 June 16, 2009 by millionmileman
Koenigsegg is the Third Swedish Car company, and this will be an exciting parent for the future development of Saab, especially as they could share unique engineering and design philosophies. When you see the brutal force of the car, I think it is only a matter of time, before they take Pikes Peak!

When I was considering driving the millionth mile in the SPG, I was proposing doing it in Sweden at the 2006 Convention, which I believe was actually held at that airbase, in Angleholm.
21:07 June 16, 2009 by spy
Well done Saab - I hope those old fashioned, doubting media are now eating their hats.
21:30 June 16, 2009 by Movedtoswedenandgotstuck
Woohooo! Now if only they will make a 1.8l 4 seater hatch that looks like a koeningsegg ccx. The wife would be happy. Lol.
23:15 June 16, 2009 by Nemesis
Well done Koenigsegg Group AB.

A car company not owned and destroyed by teh US.

There is a lesson the rest of Europe could learn from.

As for teh journalists who opposed the deal. Koenigsegg Group AB should remember there names and exclude them from everything.
08:11 June 17, 2009 by abbyrovenn
Well Done Koenigsegg and Congratulations Saab. Its nice to see that Sweds are backed by the Sweds. I was little worried that Korean, Chinese or Indian manufactures grabing Saab just for the prestige with out giving a Sh*t for its heritage.

Might be seen as a paradoxing thought so some, as me being an Asian ( Sri Lankan living most of my time in Sweden though) Yet, I like to see Saab in its Swedish heritage.

It could also be the high time that Saab expand it self into Asia. Just to be on the safe side. I'd like to see Sabbs rolling on our roads soon. :-)
16:22 June 17, 2009 by skane refugee
Whoah there!!! ... before we all get overcome with gul/blå flag waving nationalism ...

... Koenigsegg only sells 18 cars a year with 45 employees ... SAAB turns out 18 cars in 2 hours!!!!!

Koenigsegg is a PR fig leaf covering Swedish modesty here ;o) ;o)

The real money behind the deal is a blend of GM (effectively paying to get out of SAAB via debt rescheduling etc - SAABs debt to GM is a staggering MSEK3 per SAAB employee!), and the Swedish government (pumping in over MSEK1.5 per direct SAAB job/TSEK320 per job (including SAAB suppliers) via loan guarantees, despite saying they wouldn't put in a penny to support a lost cause).

The main external financial backers are Norwegian.

The smart play remains to wind down volume production as soon as is allowed in the small print of the EIB/Swedish loan deal... and shrink the company to a lucrative spares business (with SAAB owners effectively forced to pay whatever price is charged by the Norwegians/Koenigsegg for essential spare parts) ... together with selling SAAB patents and design/engineering expertise to the highest bidders :-(
18:41 June 17, 2009 by hamadani
Outstanding News

I am looking forward to Koenigsegg's touch on improving the appeal of SAAB. Also keeping SAAB's manufacture in Sweden in Trollhättan maintains the genuine heritage of SAAB which is strongly needed after GM's fiasco rebadging mix and match exercise.

SAAB makes cars that are thrilling to drive (e.g. Sonnet, 99 turbo, 93 Viggen, 93 Turbo X) and with Koenigsegg's involvement I believe they will be even more thrilling with all the high-tech needed to put that thrill to the road and control it properly (XWD system was needed for a while) and without loss of functionality and unique design.
23:20 June 17, 2009 by jack sprat
I tend to agree with S.R.

Its far too early to be popping open the champers.

Save it for 5 or 6 years down the line.

There are huge debts,a continuing recession,a possible future lack of consumer confidence in Saab outside Sweden,cost of developing and gearing up for new models, which have to be desirable, attractive and most of all reliable right from the start.

There are so many uncertain and variable factors.

The first few years will be little more than a battle just to keep their heads above the water.

Its good to see a ray of light at the end of the tunnel and also the likely enthusiastic reception of the new products by the Swedes.

However success will be all down to how the rest of the World eventually rates the new products, if Saab can stay afloat that long.
00:07 June 18, 2009 by Mzungu
Would imagine any situation is better than the one they are at present...

It's become a case of national pride, influential people will ensure it's a success. How much it's going to cost the tax payer remains to be seen.

*none of mine though!*
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