Saab Spared From Death in Last-Minute Deal

DETROIT — Saying that "a good, sustainable solution for Saab" had been reached after "a long march," General Motors on Tuesday snatched the moribund Swedish brand off death row and announced that a deal has been reached to sell Saab to Spyker Cars, the Dutch specialty carmaker. The Detroit automaker confirmed that production of the new Saab 9-5 will begin in April and that the Saab 9-4X will be launched.

GM confirmed that Spyker has agreed to pay $74 million in cash and $326 million in preferred stock in a new Saab that will emerge from the deal. The Swedish government has also agreed to guarantee a loan from the European Investment Bank amounting to $565 million as part of the Saab sale.

As part of the deal, Spyker Cars will be rechristened Saab Spyker Automobiles. The deal is expected to close in mid-February.

Saab's rescuer, which was revived in 2000, has been a minor player on the global automotive stage. It makes a handful of exotic vehicles a year costing more than $200,000 each, and has only sold 250 cars in its history, according to media reports. Spyker's corporate motto nulla tenaci invia est via, or "for the tenacious, no road is impassable," seems prophetic, given the fact that other Saab suitors, including Koenigsegg and Beijing Auto, fell away during the bidding process.

"We are very much looking forward to being part of the next chapter in Saab's illustrious history," said Victor R. Muller, Spyker's CEO, in a statement on Tuesday. "Saab is an iconic brand that we are honored to shepherd. 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."

John Smith, GM vice president for corporate planning and alliances, held a telephone conference call about the Saab deal on Tuesday afternoon and noted that "the product plan (for Saab) hasn't changed and that will be a great thing for Saab Spyker."

The Saab deal has to go down as one of the more intriguing automotive cliffhangers in recent history. GM announced plans to sell the Swedish brand a year ago. The past year was marked by Sweden's Koenigsegg Group dropping negotiations to buy Saab in November. GM put Saab into "wind-down mode" shortly after the Koenigsegg deal fell apart, but said it was considering bids from other investors, including Spyker.

"We liked the financing structure that Victor Muller and the Spyker team have put in place," said Smith. "It will give Saab Spyker some runway to get the 9-5 and 9-4X launched."

GM said the new 9-5 and 9-4X will be sold in the U.S.

GM said it will continue to provide powertrain components to Saab Spyker "for an extended period of time," along with "finished 9-4Xs" and "transition-oriented engineering services." GM also said there will be no lapse in Saab warranty coverage or parts and service in the U.S. during the transition.

When asked "what took so long" in getting Saab sold, Smith said: "This is an iconic brand, yet it's also relatively small. This past year hasn't been a great one economically for anybody in the car business or anybody in any sector. Most car companies have been busy presiding over their own restructuring efforts. That explains why the better part of a year has come and gone before we've come to a successful conclusion."

He added: "I'm happy for Saab customers all over the world."

GM said all previously announced wind-down activities for Saab "will be immediately suspended."

Spyker said the purchase price will be paid in two installments. The first $50 million will be paid at closing on February 14. The second installment of $24 million will be paid on July 15, 2010. Upon completion of the transaction, GM will retain redeemable preference shares of $326 million. The preference shares represent less than 1 percent of the voting rights in the capital of Saab, but entitle GM to dividend payments.

Inside Line says: In the end, Saab is spared the fate of Pontiac and Saturn. — Anita Lienert, Correspondent