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Scandinavian car-maker sale nigh

Looks safe: Saab is pressing ahead with the imminent launch of the crossover Saab 9-3X under Koenigsegg ownership.

Sweden’s two major car-makers go one step closer to changing hands

Saab logo19 Aug 2009

SWEDISH car-makers Saab and Volvo have edged nearer to new ownership as their American owners General Motors and Ford look to wrap up the sale of their respective Scandinavian operations.

GM has signed a deal to sell 100 per cent of shares in Saab Automobile AB to Koenigsegg Group – a consortium led by Swedish niche supercar builder Koenigsegg Automobile – by the end of the year, pending satisfactory finance arrangements.

Volvo owner Ford Motor Co is also reported to be in the final negotiations to sell its Swedish brand to one of at least two potential suitors, including a consortium of Swedish businesses called Konsortium Jakob AB and Chinese group Geely.

Both Swedish manufacturers were put on the auction block last year as a consequence of the global financial meltdown that drove GM to Chapter 11 bankruptcy and forced Ford to take major steps to avoid following suit.

However, both deals are not yet done, with question marks hanging over buyers’ finance arrangements and other ‘closing conditions’.

The Saab deal is conditional on Swedish government loan guarantees for a €600 million ($A1b) funding commitment from the European Investment Bank (EIB).

Swedish news reports this week have suggested that several backers for the Koenigsegg bid have withdrawn at the last minute, leaving the bid with a shortfall of up to three billion Swedish kronor ($A500m).

 center imageLeft: Volvo V70 production in Sweden.

But joint statement released by GM, Koenigsegg and Saab in Europe last night said GM had signed a “stock purchase agreement” with Koenigsegg regarding the sale of 100 per cent of shares of Saab Automobile.

“The deal is expected to conclude in the next months and will then secure Saab’s future,” the statement said. “Saab Automobile plans to exit legal reorganisation shortly.”

GM committed to supplying “transitional assistance” to aid the sale, adding that Saab was about to launch several new cars developed with General Motors which were in the final stages of development.

It also agreed to continue to share technology and services during an unspecified period, managed through licenses and service agreements.

Entrepreneur and CEO of the Koenigsegg Group, Christian von Koenigsegg, said the consortium planned to transform Saab into a stand-alone vibrant entrepreneurial company and make it ‘sustainable’ by making it profitable.

He promised to return Saab to its Swedish heritage of “ecological sensitivity, safety, design innovation and fun-to-drive experience”.

Saab managing director Jan Åke Jonssson said that in the short term, the deal would enable Saab to “move forward with exciting new cars starting this month with the all-new Saab 9-3X”.

Saab is also in the final throes of preparing its second-generation 9-5 to go on sale internationally next year. Based on GM’s mid-sized Epsilon II platform that spawned the Opel Insignia, the new 9-5 is expected to be launched at next month’s Frankfurt motor show.

Meanwhile, Ford is likely to wrap up its sale of Volvo later this year, according to Swedish government officials.

However, Ford is playing its cards close to its chest and has declined to discuss potential suitors.

The Swedish media said Ford representatives have had talks with Swedish business group Konsortium Jakob – named after the nickname for Volvo’s first production car, the OV 4 – over the sale of Volvo.

The other main bidder is said to be China’s Geely Automotive, in league with an unnamed Swedish investor.

Geely has launched a massive global expansion plan in recent years. It already has overseas factories in Russia, the Ukraine and Indonesia, and is reported to be planning a new plant in Mexico to supply a mid-sized car to North America.

Crucially, it is planning a new factory outside Beijing to build Volvo cars for the Chinese market.

Geely has set its hopes on buying Volvo after losing its bid to buy Opel from GM in the European car company fire sale.

As reported in GoAuto last week, Geely Automobile is planning to begin car sales in Australia from February through a West Australian-based company, Chinese Automotive Distributors headed by Perth car dealer John Hughes.

Its first foray into this market will be the Geely MK – a Corolla-sized small car.

Geely has also bought Australian automatic transmission maker Drivetrain Systems International from troubled Korean car-maker SsangYong with the objective of making its own gearboxes for its expanding range.

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