Page last updated at 20:00 GMT, Tuesday, 24 November 2009

Saab sale called off by would-be buyer

Saab Turbo X
The two sides made a preliminary deal in June

The sale of General Motors' (GM's) Swedish unit Saab has been called off after the would-be buyer pulled out of the deal.

Swedish sportscar maker Koenigsegg said it had "come to the painful and difficult conclusion" that it could no longer carry out the acquisition.

GM said it was "very disappointed" by the decision.

The two sides had announced a preliminary agreement over the sale of loss-making Saab in June.

Stronger GM

"Given the sudden change in direction, we will take the next several days to assess the situation and will advise on the next steps next week," said GM president and chief executive Fritz Henderson.

I think GM will now simply maintain Saab
Independent car industry analyst Robin Roberts

The news comes three weeks after GM announced that it was calling off plans to sell its other European business, Opel, along with its UK brand Vauxhall.

GM had agreed to sell Opel and Vauxhall to Canadian car parts firm Magna, but changed its mind.

It had put both Opel and Saab up for sale at the start of the year before it went into bankruptcy protection in the US on 1 June, which it then exited in just over one month after support from the US government.

GM's finances have greatly improved since then, leading to its decision to keep Opel and Vauxhall.

Another U-turn?

Independent car industry analyst Robin Roberts said it was likely that GM would be pleased to keep Saab.

"I think GM will now simply maintain Saab," he said.

"Saab may currently be loss-making, but GM desperately needs to have a prestige brand in Europe.

"But if it does now seek to find another buyer, there are a number of Chinese firms who would love to have Saab, such as Beijing Automotive."

However, David Cole, chairman of the US Center for Automotive Research in Ann, said simply shutting down Saab remained "one option".

Mr Roberts added that there had been growing speculation in recent weeks that Koenigsegg may pull out of the deal.

Delay

Koenigsegg itself blamed its decision on "delays in completing the deal", which had "led to risks and uncertainties".

If the deal had gone ahead, it would have greatly increased the size of Koenigsegg.

The specialist maker of performance cars currently employs 45 people, and produces just 18 vehicles per year.

Saab, by contrast, has a workforce of 3,892, and produced 90,281 cars in 2008.

To finance the deal, Koenigsegg was seeking a 400m euro ($600m; £360m) loan from the European Investment Bank, and wanted the Swedish government to act as a guarantor.

Stockholm had yet to make a decision on the issue.

Saab spokesman Eric Geers said the company was disappointed by the development.

"We had hoped this deal would go through," he said.

"We have a good business plan, but now Koenigsegg has pulled out, so we will have to see what will happen."



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SEE ALSO
GM plans to cut 10,000 Opel jobs
05 Nov 09 |  Business
German fury over GM Opel U-turn
04 Nov 09 |  Business
GM agrees Saab sale to Koenigsegg
16 Jun 09 |  Business

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