Late on Tuesday (26 January, 2010) GM and Spyker Cars NV both confirmed that they had reached a binding agreement on the purchase of Saab Automobile AB by Spyker.
A deal had seemed very close earlier today when Spyker’s shares were suspended on the Amsterdam stock market ahead of an announcement; Spyker shares spiked 80% yesterday.
“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 John Smith, GM vice president for corporate planning and alliances.
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“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,” Smith said.
As part of the agreement, Spyker intends to form a new company, Saab Spyker Automobiles, which will carry the Saab brand forward. The sale will be subject to the usual closing conditions, including receipt of applicable regulatory, governmental and court approvals. Other terms and conditions specific to the sale will be disclosed in due time, GM said.
The Swedish government is at present reviewing the transaction and the related request for guarantees of a Saab Automobile loan that has been requested from the European Investment Bank (EIB). Assuming quick action, the transaction is expected to close in mid-February, and previously announced wind-down activities at Saab will 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,” added Nick Reilly, president, GM Europe.
“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.”
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By GlobalDataAnalysts note that while it has now been thrown a lifeline, loss-making Saab faces a long haul to be profitable under its new owner and some job losses are still expected.
“It’s a really brilliant brand. It’s probably one of the biggest brand mismanagement stories in the history of the automotive industry,” said IHS Global Insight analyst Tim Urquhart.
“Saab could have been the ‘Swedish Audi’ if it had been taken on in the right way 20 years ago. It’s been completely mismanaged, underinvested in by people who don’t understand what the brand means, and what it has the potential to mean.”
“One might assume that this is good for GM because the company could use the cash and the executives are trying to keep the company focused on core brands,” said Edmunds.com senior analyst Jessica Caldwell, “But, in truth, Saab represents competition for GM’s Opel brand, and Saab’s new owner will likely work hard to make the investment pay off, which may make Saab that much more competitive in the long run.”
“While many around the globe, especially in Sweden, will be thrilled to see the quirky but much-loved Saab brand saved, the new owners have their work cut out for them. It will not be an easy road to keep the tiny company going and growing in the intensely competitive world market,” added Caldwell’s colleague Michelle Krebs.
