General Motors and Koenigsegg Group AB today confirmed details of a memorandum of understanding for the purchase of Saab Automobile AB that is intended to secure Saab's future. Saab had filed for reorganization under Swedish Law on Feb 20, 2009. This tentative agreement is intended to allow Saab to successfully emerge from its reorganization process.
The sale is expected to be completed by the end of the third quarter and will includes a $600 million funding commitment from the European Investment Bank (EIB) guaranteed by the Swedish government. Additional support is to be provided by GM and Koenigsegg Group AB to fund Saab's operations and product program investments.
Part of the funding will be used to launch several new products that are in the final stages of development. The proposed transaction will ensure GM continues to provide Saab with architecture and powertrain technology during a defined time period. Additionally, Saab plans to produce its next generation 9-5 models in the Saab production facility in Trollhttan, Sweden after most production was moved overseas.
"The proposed agreement will enable us to maximize the brand's potential through an exciting new product line-up with a distinctly Swedish character. Today's announcement is great news for Saab's current and future customers, dealers, suppliers and employees around the globe," said Jan ke Jonsson, Managing Director of Saab Automobile AB.The sale will be subject to customary closing conditions, including receipt of applicable regulatory, governmental and court approvals. Other terms and conditions specific to the sale are not being disclosed at this time.
Koenigsegg Group AB is a consortium of private investors led by Koenigsegg Automotive AB, the specialist sports car manufacturer that currently produces around 18 cars per year and employs approximately 45 people. The company was founded in 1994 and is based in ngelholm, Sweden.
Some doubt has been voiced about the ability of Koenigsegg to run a company the size of Saab, which sold more than 90,000 cars last year. However, it's hoped the new consortium will be able to return the quintessential Swedish brand to its exciting former glory, moving it away from the rather bland GM-derived product of recent years.