GM to sell Saab to Dutch carmaker Spyker
Published: Tuesday, January 26, 2010 at 3:17 p.m.
Last Modified: Tuesday, January 26, 2010 at 3:17 p.m.
DETROIT — Saab got a new life Tuesday as General Motors Co. agreed to sell the Swedish car brand to the small Dutch luxury carmaker Spyker Cars NV.
Under the deal, GM will get $74 million in cash plus $326 million worth of preferred shares in Saab, John Smith, GM vice president of global planning and alliances, told reporters. GM will get "other consideration" which Smith would not specify.
The Swedish government has agreed to guarantee up to 4 billion kronor ($550 million) in loans through the European Investment bank to make the deal happen, Industry Minister Maud Olofsson said.
The deal would be a coup for Spyker and a lifeline for Saab, which has lost money for years under GM's ownership and was slated for liquidation. Saab has around 3,500 employees in Sweden.
But it's also a huge challenge for Spyker, which sold only 23 cars in the first half of 2009, its most recent reporting period, and posted a net loss of €8.7 million. The 6-year-old company has yet to make a profit, but it says funding for its operations have been guaranteed through 2010.
The sale of Saab is "great news for Saab employees, dealers and suppliers, great news for millions of Saab customers and fans worldwide, and great news for GM," said John Smith, a vice president at GM who was in charge of the negotiations.
Saab spokeswoman Gunilla Gustavs said "We are very happy" about the deal. She declined further comment saying Saab and Spyker officials would talk about the agreement at a news conference in Stockholm later Tuesday.
GM has been trying to shed Saab for more than a year as part of a massive restructuring process after it emerged from bankruptcy protection. The company also plans to sell Hummer, but will phase out Saturn and Pontiac so it can focus on four brands: Chevrolet, Buick, GMC and Cadillac.
To win the bidding process, Spyker had to overcome reservations within GM that it didn't have the expertise to run a car company. Several GM executives were afraid of getting tangled up with the Dutch automaker because GM will at least for a short time have to continue providing vehicles for Saab.
Spyker bested Luxembourg private equity group Genii Capital to win the bidding for Saab. Genii withdrew from the bidding Monday, saying "the timing of the bidding process for Saab is incompatible with implementing a solid business platform for the future."