GM offloads Saab
BY MARTON PETTENDY | 27th Jan 2010
As expected, GM formally – and finally - announced the sale of Saab Automobile AB to Dutch supercar company Spyker Cars NV earlier today, despite saying yesterday it would continue to wind down the 72-year-old Swedish car-maker.
“We know that the deal has been sealed between Spyker and GM and therefore the government has decided today to give the loan guarantee to Saab Automobile," said Sweden’s enterprise minister Maud Olofsson following GM’s announcement today.
Conditional on approval of the loan from the EIB itself and the European Commission, Spyker will form a new company, Saab Spyker Automobiles, while Saab will become the fourth brand after Pontiac, Saturn and Hummer to leave the GM stable since it emerged from Chapter 11 bankruptcy last July.
As part of the deal, which could save many of the 3500 jobs at Saab’s home factory at Trollhattan, Spyker will give GM $US74m ($A82m) cash for Saab, with $US50 million ($A56m) to be paid on completion of the transaction – which is expected to occur by mid-February - and the remaining $US24 million ($A27m) on June 15.
GM will retain $326 million ($A363m) of shares in Saab, entitling it to less than one per cent of voting rights in the new company but allowing it to share in potential future profits, payment of which will be deferred until after 2013.
Spyker confirmed it has taken additional loans and extended a $US150 million ($A167m) credit line to fund the deal, which includes Saab’s wholly owned UK sales, marketing and distribution arm, Saab Great Britain Limited, which will split with GM UK Limited.
Today’s official sale announcement followed the withdrawal on Monday night of the only other remaining bidder, private equity company Genii Capital, backed by Formula One powerbroker Bernie Ecclestone.
Previous Saab suitors included Swedish supercar maker Koenigsegg, a group led by former Swedish deputy prime minister Jan Nygren and a US-based group led by Merbanco Inc president Chris Johnston.
Suspended from trade in Amsterdam before the announcement, Spyker shares last traded at €3.91 ($A6.12), valuing the company at €84.8 million ($A132.8m).
Led by major shareholder and CEO Victor Muller, Spyker has confirmed it intends to develop Saab as an independent premium brand, despite analysts claiming Sweden’s second-largest car-maker lacks the economy of scale and cashflow to survive.
“We are very much looking forward to being part of the next chapter in Saab's illustrious history,” said Mr Muller. “Saab is an iconic brand that we are honoured to shepherd. We are delighted to have secured the jobs and livelihoods of thousands of loyal Saab employees, suppliers and dealers and to have given reassurance to the 1.5 million Saab drivers and enthusiasts around the world.
“It was breathtaking to see so much support from the global Saab community over the last months which not only shows the strength of the brand but also helped us in our relentless determination to get the deal done.
“Spyker Cars will provide Saab with the backing required to compete as a competitive global brand along with an entrepreneurial leadership team sensitive to the uniqueness, heritage and individuality of the Saab brand.
“The next task is for Saab to become profitable in its own right, and that's not an easy task. But it is one that I think can be achieved.”Significantly, Saab’s 9-3 and redesigned 9-5 - the brand’s first all-new model in seven years, which enters production later this year - will continue be built at Saab’s Trollhättan HQ, which was extensively restructured to help make the company profitable with sales of less than 100,000 vehicles per annum, under Spyker control.
Saab sales in the US and Europe slumped by 59 per cent last year, to a respective 8680 and 26,567 vehicles.
Koenigsegg Group AB, backed by China’s Beijing Automotive Industry Holding Co, pulled out of Saab negotiations with GM in November, although Beijing Auto later paid $US200 million ($A222.4m) to acquire technology from Saab for its own vehicles.
But Spyker’s acquisition statement stressed that all Saab’s assets and intellectual property were part of the purchase.
“In spite of media reports that certain parts have already been sold off, the object is Saab as a complete entity and going concern with all IP rights, trademarks, facilities and other infrastructures,” it said.
“The sale of pre-2003 Saab 9-3 and current Saab 9-5 technology to BAIC in December 2009 did not result in any part of Saab’s business being divested or devalued. On the contrary, Saab has already started the production of the new-generation Saab 9-5 in Trollhättan.”GM, whose Mexican factory has commenced production of the XC90-sized Saab 9-4X SUV, today confirmed the binding agreement between Spyker and Saab.
“Today’s announcement is great news for Saab employees, dealers and suppliers, great news for millions of Saab customers and fans worldwide, and great news for GM,” said GM vice-president for corporate planning and alliances John Smith.
“General Motors, Spyker Cars and the Swedish government worked very hard and creatively for a deal that would secure a sustainable future for this unique and iconic brand, and we're all happy for the positive outcome,” said Mr Smith, adding that GM’s wind-down activities would be “immediately suspended, pending the close of the transaction”.
“Throughout the negotiations, GM has always had the hope to find a solution for Saab that would avoid a wind down of the brand,” said GM Europe president Nick Reilly.
“We’ve worked with many parties over the past year, including governments and investors, and I’m very pleased that we could come to such a good conclusion, one that preserves jobs in Sweden and elsewhere. GM will continue to support Saab and Spyker on their way forward.”After more than a year of seeking Saab buyers, GM, which acquired half of Saab in 1990 before claiming full ownership in 2000, finally decided to close the unprofitable Scandinavian unit in December, before it received a revised offer from Spyker.
“It has been a challenging 15 months for Saab but our global organisation has shown a fighting spirit that will serve us well going forward,” said Saab CEO Jan-Aake Jonsson, who handed power over to liquidators on January 12 before the Saab board was disbanded, but will now return to his post immediately.
“The agreement with Spyker Cars has secured Saab’s future and will enable us to maximise the brand’s potential through an exciting new product line-up with a distinctly Saab character.”As part of the deal, Spyker chairman and the largest investor in Netherlands-based sportscar maker Zeewolde, Russian banker Vladimir Antonov, will sell his 4.6 million Spyker shares to Tenaci Capital BV - an equity firm owned by (Spyker CEO) Mr Muller – in an arrangement demanded by GM, which feared its intellectual property could be used in the Russian car industry.
Commenting on the Saab-Spyker deal at a separate event in Stockholm today, Fiat and Chrysler CEO Sergio Marchionne, who said he was interested in buying Saab last year while Italy’s Fiat SpA was bidding for GM Europe’s Opel division, said he expected the new Saab to struggle.
“I like the Saab brand, but I think it’s very difficult to be a niche player and profitable. Marginal players will continue to be marginalized,” he said.
GM backed out of an arrangement to sell Opel to a group led by Magna International and Russian bank Sberbank in November, but last week announced the closure of Opel’s 85-year-old Antwerp plant in Belgium this year, at a cost of 2300 jobs.
