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Koenigsegg to buy Saab
STOCKHOLM (Reuters) – Sweden's Koenigsegg, maker of some of the world's fastest and most expensive sports cars, has struck a deal to buy loss-making Saab Automobile from General Motors, the companies said on Tuesday.
In one of the most unlikely pairings in automotive history, the tiny sports car firm of 45 staff is expected to take over a company that employs around 3,400 staff, a cherished Swedish brand that became a national icon for stability and reliability.
GM Europe said on its website the deal, set to close by the end of the third quarter, includes an expected $600 million of financing from the European Investment Bank, which would be guaranteed by the Swedish government.
Other terms were not disclosed.
"Additional support is to be provided by GM and Koenigsegg Group AB to fund Saab's operations and product program investments. This includes plans to launch several new products that are in the final stages of development," GM Europe said.
Like its U.S. parent, Saab has been in bankruptcy protection and GM Europe said the accord was a milestone in the Swedish company's effort to emerge from the process.
Koenigsegg, which produces powerful road cars that cost around $1 million, came out of nowhere to emerge as a front-runner to buy Saab.
But analysts are skeptical a tie-up makes sense, noting that Christian von Koenigsegg, founder of the firm bearing his name, has no evident experience owning or running a firm so large.
Last year Koenigsegg made 18 cars, Saab more than 93,000.
"There are no economies of scale between Saab and Koenigsegg. This is a constellation of buyers that probably have different interests than GM, which was driven by volume," said Mikael Wickelgren, an automotive expert at Skovde University, in southwestern Sweden not far from Saab's headquarters.
"This will be a business where one would assume that the owners want to chisel out a personality for Saab. The logic would be in the special and unique. Otherwise I cannot understand this deal."
Koenigsegg has backing from Norwegian entrepreneur Bard Eker, whose holding company owns 49 percent of the car maker.
Halldora von Koenigsegg, spokeswoman for the company and wife of its founder, said a memorandum of understanding had been signed but declined to comment further.
TWO DECADES UNDER GM
The deal would see Saab, which was put up for sale earlier this year, emerge from two decades under its U.S. parent.
While Saab is known for its appeal to safety-conscious but slightly sporty family drivers, Koenigsegg caters for clients who arrive in private jets at the firm's factory, which boasts its own airstrip.
Christian von Koenigsegg, who founded his firm 15 years ago when he was 22, is known in the industry as a quality-obsessed car enthusiast as opposed to a businessman.
But Saab and Koenigsegg share a history of technological innovation. Koenigsegg has patented some of his own gadgetry while Saab created a sensation in the 1970s with the use of turbo technology in everyday cars.
Now Saab says it needs $1 billion to help it overhaul production and launch new models while absorbing expected losses of about 3 billion Swedish crowns ($382 million) this year.
An EIB official said its board needed to have key information some six weeks before a meeting. "That means we will not be able to have it ready before the meeting in July, and the next meeting is in September," said Mats Gunnarsson, senior adviser to the EIB management committee.
Joran Hagglund, state secretary for Sweden's industry ministry, told Reuters: "We do not yet know if Koenigsegg group will need loan guarantees or not."
Nonetheless, Industry Minister Maud Olofsson welcomed the news as did Saab worker representatives. She said Saab staff and other residents in the town of Trollhattan, where Saab is headquartered, had been waiting for just a development.
(Writing by Adam Cox; Editing by Greg Mahlich)
($1=7.850 Swedish crowns)
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