STOCKHOLM — Saab Automobile, General Motors Corp.'s struggling Swedish unit known for its family cars, was rescued Tuesday by a consortium led by Koenigsegg Automotive AB, a tiny company that produces only a dozen or so custom-made super cars a year.
Having penned a memorandum of understanding, GM said the sale would include an expected $600 million funding commitment from the European Investment Bank, guaranteed by the Swedish government. Additional funding for Saab's operations and investments would be provided by GM and the Koenigsegg Group AB consortium, it said.
"This is yet another significant step in the reinvention of GM and its European operations," GM Europe president Carl-Peter Forster said in a statement.
GM bought a 50 percent stake in Saab for $600 million in 1990 and acquired the rest for $125 million in 2000. Saab has more than 4,000 workers worldwide, is represented in some 50 countries, and typically produces more than 100,000 cars a year. Saab went into creditor protection Feb. 20 in an effort by GM to sell the unit.
Saab chief executive Jan Ake Jonsson called the deal "great news" and said it would help the brand to maximize it's potential "through an exciting new product lineup with a distinctly Swedish character."
The sale is expected to be completed by the end of the third quarter and is subject to regulatory approvals.
Global Insight analyst Tim Urquhart called it "the best possible outcome for Saab," describing Koenigsegg as a respected company with a sensible financial structure.
"Koenigsegg certainly faces a massive task in returning Saab to a state where it is a profitable and vibrant premium passenger carmaker," he said, but said it could revitalize the brand and steer it into greener technologies.
"The trick will be to position the brand at a price point where it can become profitable at the 120,000- to 150,000-unit mark and offer enough 'unique' technology and design identity to make the brand compelling," he said.