Jan. 26 (Bloomberg) — General Motors Co. agreed to sell its Saab unit to sports-car maker Spyker Cars NV in a deal that would save the 72-year-old Swedish brand from extinction.
The transaction, subject to a 400 million-euro ($564 million) European Investment Bank loan for Saab to be guaranteed by Sweden, is expected to close in February and Saab will then end an orderly wind-down process, GM said in a statement today. Spyker agreed to pay $74 million in cash and $326 million in preferred shares in the company that would emerge from the deal, a person familiar with the matter said.
Saab is among four brands, along with Pontiac, Saturn and Hummer, that Detroit-based GM is unloading to focus on Chevrolet, Buick, GMC and Cadillac in the U.S. after its bankruptcy exit on July 10. A sale of Saab may save many of the 3,500 jobs at Saab’s main factory in Trollhaettan as well as thousands of positions at Swedish parts suppliers.
“GM gave it a good shot,” said Mike Tyndall, a European automotive analyst with Nomura Securities in London. “The future of Saab is still very uncertain. Spyker saved them for now, but they still have to address the underlying problems of the business, which are lack of scale and lack of profit.”
Spyker shares were suspended in Amsterdam trading before the announcement. They last traded at 3.91 euros, valuing the company, led by Chief Executive Officer Victor Muller, at 84.8 million euros.
Russian Investor
Swedish Industry Minister Maud Olofsson will brief reporters in Stockholm at 7:40 p.m. local time on Saab. John Smith, GM’s vice president for global planning and alliances, will hold a conference call at 8 p.m. in Stockholm, or 2 p.m. in Detroit.
Swedish sports-car maker Koenigsegg Group AB, backed by Beijing Automotive Industry Holding Co., walked away from a deal to buy Saab in November. Beijing Auto later paid $200 million to buy some car technology from Saab to use in its own vehicles.
Negotiations to sell Saab to Spyker collapsed last month, prompting GM to decide to shut down the money-losing brand. Muller has since revised his bid. GM would sell to Spyker only on the condition that Russian businessman Vladimir Antonov, the chairman and biggest investor in the Zeewolde, Netherlands-based sports-car maker, exit the company, a person familiar with the talks has said.
Genii, Merbanco
As part of today’s agreement, Tenaci Capital BV, a company owned by Muller, will take over Antonov’s 4.6 million Spyker shares when the deal is completed. Antonov, Martins Bondars and Naglis Stancikas will step down as supervisory board members, Spyker said.
Other bidders included Genii Capital, the private-equity firm that teamed up with Formula One tycoon Bernie Ecclestone; a group headed by former Swedish deputy Prime Minister Jan Nygren; and a Wyoming-based group led by Merbanco Inc. President Chris Johnston.
Saab’s sales in the U.S. slumped 59 percent to 8,680 vehicles last year. European deliveries also fell 59 percent, to 26,567 cars. The compact 9-3 sedan makes up a majority of Saab’s sales. Saab has been retooling its plant in Trollhaettan to begin production of a 9-5 sedan this year, the company’s first new model in seven years.
Saab, which traces its roots to aircraft company Svenska Aeroplan AB, was founded in 1937 to secure production of Swedish warplanes. The first car left the factory a decade later. GM bought half of Saab in 1990 and took full ownership in 2000.
Liquidation
Sergio Marchionne, CEO of Fiat SpA and Chrysler Group LLC, said today that Saab would face a tough future under Spyker’s ownership.
“I like the Saab brand, but I think it’s very difficult to be a niche player and profitable,” Marchionne said at an event in Stockholm. “Marginal players will continue to be marginalized.”
The CEO said last year that he was interested in buying Saab while Turin, Italy-based Fiat was bidding for GM’s Opel division. GM decided to keep Opel in November, backing out of a pact to sell it to a group led by Magna International Inc.
Saab CEO Jan-Aake Jonsson handed over power to liquidators on Jan. 12 and the board was disbanded. The Swedish Companies Registration Office has named GM nominees AlixPartners LLP Managing Director Stephen Taylor and Peter Toerngren of Swedish law firm Toerngren Magnell, to supervise the wind-down.
