Financially challenged US carmaker General Motors has announced that it has agreed with Koenigsegg Group AB to a Memorandum of Understanding for the purchase of Saab Automobile AB, its loss making Swedish automotive arm.
GM says the deal with the consortium, led by Koenigsegg Automotive AB, will secure Saab’s future.
The sale, expected to close by the end of the third quarter of this year, includes an expected US$600 million funding commitment from the European Investment Bank (EIB) guaranteed by the Swedish government.
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.
Saab filed for reorganisation under Swedish Law on February 20, and GM says this tentative agreement is a key milestone for Saab to successfully emerge from its reorganisation process.
“This is yet another significant step in the reinvention of GM and its European operations,” said GM Europe President, Carl-Peter Forster.
“Saab is a highly respected automotive brand with great potential. Closing this deal represents the best chance for Saab to emerge a stronger company.
“Koenigsegg Group’s unique combination of innovation, entrepreneurial spirit and financial strength, combined with Koenigsegg’s proven ability to create world-class Swedish performance cars in a highly efficient manner, made it the right choice for Saab as well as for General Motors.”
As part of the proposed transaction, GM will continue to provide Saab with architecture and powertrain technology during a defined time period.
In addition, Saab plans to produce its next generation 9-5 models in the Saab production facility in Trollhättan, Sweden.
“The proposed agreement will enable us to maximise the brand’s potential through an exciting new product line-up with a distinctly Swedish character.
“Today’s announcement is great news for Saab’s current and future customers, dealers, suppliers and employees around the globe, said Jan Åke Jonsson, Managing Director of Saab Automobile AB.
A statement by GM and Koenigsegg says the sale will be subject to customary closing conditions, including receipt of applicable regulatory, governmental and court approvals. The statement says other terms and conditions specific to the sale are not being disclosed at this time.
Koenigsegg currently has less than 50 employees and turns out only a handful of $1 million super cars a year.
GM, which filed for Chapter 11 protection June 1, put Saab up for sale after deciding to cut its 20-year ties with the brand.
Saab produced nearly 100,000 cars last year, about 1 percent of GM’s global output. GM has held talks with a number of potential buyers for Saab, including Fiat and Chinese carmakers.