General Motors and Koenigsegg Group have signed a stock purchase agreement for the sale of Saab Automobile AB. The deal encompasses the sale of 100% of the shares of Saab Automobile AB (Saab) and is expected to conclude by year’s end, as the Swedish automaker concludes its reorganization. This is good news for all involved – GM becomes leaner, Saab continues to exist, and Sweden gets to retain a national product. However, the stock purchase agreement will be subject to certain closing conditions, namely expected funding commitments with Swedish government support and guarantees, as well as transitional assistance from GM.
The announcement comes just as Saab is gearing to launch several new models (all new 9-5 and 9-3x in the U.S). As part of the proposed transaction, GM and Saab will continue to share technology and services during a defined time period, which will be managed through licenses and service agreements.
This announcement presents a good deal of benefits to all parties involved:
- Our beloved GM gets to drop some weight off its shoulders and trim another brand from its portfolio, becoming a leaner and meaner vehicle-making machine. On top of that, Cadillac has taken the place of true performance luxury – a space where Saab sort-of competed, albeit with the wrong set of tools (FWD platforms). In that regard, Saab is no longer needed in the product mix. Who decided to buy it anyway, and why?
- Saab continues to exist. What more could you ask for when you’re a mainstream brand that moves less than one quarter the volume of your competition?
- Koenigsegg becomes partial owner (with the Swedish government) of Saab. This will allow the exotic car manufacturer to apply some of its super-car expertise to a mainstream (read: more affordable) brand. I think that Koenigsegg will turn Saab into what it never had the chance to be under GM – a more warm competitor (interior designs) to BMW at a more affordable price.
- The Swedish government will need to shell out some cash upfront to complete the acquisition of Saab and support the brand until it becomes profitable. It will most likely need to invest in research and development (new platforms, engineering) and marketing until the company gets to a point of profitability and a more mainstream appeal. The Swedish auto workers will get to hold on to their jobs, since production will remain in Sweden.
Trivia: the AB in Saab Automobile AB stands for Aktiebolag, Swedish for “corporation,” similar to AG, Ltd, and Inc.[Source: GM]