Beijing Automotive Buys Some Saab AssetsBy Michelle Krebs December 14, 2009
General Motors confirmed Monday morning it had reached an agreement with Beijing Automotive Industry Holdings Co., Ltd. to sell some Saab assets to the Chinese automaker.
Meantime, talks with potential bidders to buy the rest of the Swedish automaker continue. The deal with BAIC could improve GM's prospects for finding a buyer for Saab, though Saab's survival remains questionable.
"This arrangement (with BAIC) is excellent for both parties, now and for the future," Jan Anke Jonsson, Saab Automobile managing director, said in a statement. "We have developed a good relationship with BAIC and look forward to working with them to integrate this Saab technology into their future vehicles."
No financial details were revealed.
BAIC recently arranged a nearly $3 billion line of credit, only a small amount likely was used for the acquisition of the Saab assets. The automaker is shopping the globe for Western technology.
Under its deal with GM, BAIC will acquire the tooling, powertrain technology and intellectual property related to current Saab 9-5, set to be replaced with a new version, and the Saab 9-3. Saab will assist in integrating its technology into BAIC vehicles. BAIC plans to move the 9-5 tooling to China where it will be used to make BAIC vehicles.
BAIC's purchase of some Saab assets could help GM's prospects for selling the rest of Saab as the deal generates desperately needed cash. It's not clear if BAIC is among the potential bidder for the rest of Saab. The Chinese automaker had agreed to provide financing for Swedish sports car maker Koenigsegg Automotive's bid for Saab in return for access to the Saab brand and technology in China
GM has set a deadline of end of the year to find a buyer for Saab or it will wind down the brand as it has Saturn and Pontiac. Insiders say GM will not announce a deal until a contract has been signed as it doesn't want to be publicly humiliated again after deals to sell Saab to Koenigsegg and Saturn to Penske Automotive Group failed.
Dutch sports car maker Spyker Cars is said to be the leader among potential bidder for Saab. That deal would be backed by Russian banker Vladimir Antonov.
Spyker, which makes $235,000 sports cars, was negotiating with GM over the weekend in Zurich, unnamed sources told Bloomberg News. Bloomberg also reporters other bidders expressing an interest in Saab include Merbanco Inc., a Wyoming-based investor, and billionaire Ira Rennert's Renco Group Inc.
The sale of Saab will depend on Sweden's guarantee and European Union's approval for a nearly $585 million loan from the European Investment Bank, the sources told Bloomberg.
Still, there's no guarantee the money-losing Saab will survive even if it is purchased, having sold a scant 100,000 vehicles globally last year. Its sales fell even further this year with the economy and with its future uncertain.
Similarly, Spyker has hasn't made a profit since its initial public offering in 2004. -- Michelle Krebs, Senior Analyst and Editor at Large
Photos by GM
1 - Production equipment for the current 9-5 will be shipped to China to make BAIC vehicles.
2 - Chinese automaker BAIC has acquired some assets the Saab 9-3.