Wednesday September 9, 12:39 PM
Swedish carmaker, China's BAIC to buy Saab
By Pia Ohlin
STOCKHOLM (AFP) - Swedish sports car maker Koenigsegg has teamed up with Beijing Automotive Industry Holding Co Ltd (BAIC) to buy Saab (Stockholm: SAABB.ST - news) from its US parent company General Motors (NYSE: GM - news) , Koenigsegg said Wednesday.
Koenigsegg Group said BAIC, China's fifth-largest automaker founded in 1958, would become a minority owner in Koenigsegg Group as part of a memorandum of understanding signed between the two parties.
BAIC already has joint ventures with DaimlerChrysler Benz and Hyundai (011760.KS - news) .
"Koenigsegg Group will own 100 percent of Saab Automobile. The aim is to sign a final agreement later this year," it said in a statement.
The Swedish group had been short 3.0 billion kronor (290 million euros, 412 million dollars) to complete the acquisition of Saab first announced in June, though the total purchase price has never been disclosed.
With Wednesday's announcement, Saab, which built its first prototype cars in 1947, has now moved another step closer to returning to Swedish ownership after an unhappy, largely unprofitable two decades under American management.
"This is an important step on the way to a new Saab. We have a well thought-out business plan, an important partnership and we are now ready to move ahead without state financing," the head of Koenigsegg Group, Christian von Koenigsegg, said in a statement.
No other details would be disclosed due to a confidentiality agreement, he said.
Koenigsegg Group, founded in 1994 by von Koenigsegg, has just 45 employees and produces 18 high-end sports cars a year at more than a million euros (1.4 million dollars) each.
Saab, by contrast, employs 3,400 people in Sweden alone and sold just over 93,000 cars worldwide in 2008.
Koenigsegg still has to convince the Swedish government of the viability of its business plan for the iconic carmaker.
The niche sports carmaker is seeking a 400-million-euro (600-million-dollar) loan from the European Investment Bank and wants the Swedish government to act as a guarantor.
Koenigsegg Group said it was "now focusing on the discussions" for the state guarantees.
Christian von Koenigsegg has previously said he wants "to transform Saab into a stand-alone vibrant entrepreneurial company and make it 'sustainable' by making it profitable."
"I see Saab as having its own niche as a post modernist, sporty, comfort car with an environmental aspect," he said in June.
But questions have abounded in Sweden over what the future holds for Saab, with some experts and commentators expressing doubts about whether Saab's new owners have the necessary expertise to run a major car company.
Under GM's stewardship, Saab rarely posted a profit and last year lost 3.0 billion kronor (241 million euros, 341 million dollars at the time).
Another Chinese carmaker, Geely Holding Group, has confirmed its interest in acquiring Sweden's other carmaker, Volvo Cars, from US group Ford.
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