After a year-long search, General Motors finally found a buyer for Saab. Spyker Cars, a Dutch sports-car maker, agreed Tuesday to buy the orphaned Swedish unit for $400 million. The offer comprises $74 million in cash and $326 million in preferred shares, GM told reporters during a conference call.Saab is seeking to borrow a €400 million ($566 million) from the European Investment Bank, to be backed by Sweden's government. Sweden said the EIB and European Commission were still reviewing the loan, Reuters reported. The deal, subject to customary regulatory approvals, is expected to close by mid-February, "assuming quick action," GM said in a written statement.
"Today's announcement 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 Vice President John Smith. "General Motors, Spyker Cars, and the Swedish government worked very hard and creatively for a deal that would secure a sustainable future for this unique and iconic brand, and we're all happy for the positive outcome."
The new company, to be known as Saab Spyker Cars, will continue to honor existing warranties, GM officials said.
Change of Heart
The deal sounds a hopeful note for Saab and its 3,400 workers, most of whom were thought to be on their way to the unemployment lines. Despite overtures by Spyker beginning late last year, GM showed little outward interest in the company, which makes only a few dozen cars each year. Indeed, as late as Monday, GM said it was planning an orderly wind down of the 72-year-old company, which is based in the southern Swedish town of Trollhattan.
GM had previously made few comments about Spyker's bids, except to say it was considering all offers. Spyker bid for Saab after Swedish luxury-car maker Koenigsegg Group suddenly pulled out of its proposed deal in late November, saying it was unable to secure financing in time to close the deal by GM's Dec. 31 deadline.
Several other suitors stepped forward after Koenigsegg dropped out. But Spyker emerged as the sole bidder after another 11th-hour offer, put forth by Genii Capital, with the backing Formula One race-car legend Bernie Ecclestone, was withdrawn on Jan. 25.
So, You Want to Be a Carmaker?
GM has been searching for a buyer for Saab since January 2009. With its future uncertain, sales have suffered. Saab sold only 8,690 cars in the U.S. last year, compared to more than 21,000 in 2008. In December, Saab sold just 786 cars nationwide. Asked why it took so long to offload the Saab brand, Smith told reporters during the conference call that 2009 was a tough year for anyone in the car business, with most related companies occupied with their own restructuring efforts.
"For somebody not in the car business to want to get in it, it's not been a great time to feel very optimistic about it," Smith said. The extent to which Saab employees and loyal customers can retain optimism about the brand's future depends much on Spyker's ability to turn the company around. It's worth noting that neither Spyker nor Saab are profitable.
GM's decision to sell Saab to Spyker follows a deal reached last month by Ford Motor (F) to sell Sweden's other large carmaker, Volvo, to China's Zhejiang Geely Group for some $2 billion. That deal is expected to close during the second quarter.
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