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Spyker has deal to buy Saab from General Motors, avoiding shutdown

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Spyker has deal to buy Saab from General Motors, avoiding shutdown

Chrissie Thompson

Automotive News -- January 26, 2010 - 10:16 am ET

UPDATED: 1/26/10 4:36 p.m. ET

DETROIT -- Dutch sports car maker Spyker Cars NV today reached a tentative agreement to buy Saab from General Motors Co., saving the Swedish brand from a shutdown after two decades of GM control.

The purchase will create a new company, called Saab Spyker Automobiles NV. Spyker said it expected the sale to close by Feb. 15.

“I want to give credit where credit is due: to the Swedish government and to Spyker Cars for working with us and working creatively,” said John Smith, GM vice president for corporate planning and alliances, during a conference call with reporters.

The transaction, if completed, will enable GM to sell at least one of its disappearing U.S. brands. The automaker is winding down Saturn after a sale to Penske Automotive Group Inc. fell through in September. A deal to sell Hummer to Sichuan Tengzhong Heavy Industrial Machinery Co. is awaiting Chinese government approval. GM is also phasing out Pontiac.

Spyker said it will pay GM $74 million in cash -- $50 million by Feb. 15 and the rest by July 15 -- in addition to $326 million worth of preferred shares in the merged company. The shares represent less than 1 percent of Saab Spyker's voting rights, Spyker said.

The Swedish government also has agreed to guarantee a European Investment Bank loan valued at about $563.5 million. The deal is subject to approval by the European Commission, Spyker said.

Smith said he couldn't provide details on a "third bit of consideration" in the deal.

Spyker said it had obtained $211.3 million in “back-up” financing from GEM Global Fund Ltd.

Spyker CEO Victor Muller said the agreement had to sort out “trying to take a company that was part of General Motors for 20 years and carving that out as a different business. It was a massive exercise and a lot of different issues. We have a lot of work to do. For a moment, we are going to celebrate.”

Extended effort

GM has been trying to sell Saab for more than a year. In late December, GM said it would wind down Saab operations, although negotiations for a sale continued. That wind-down ends immediately, Spyker and GM said today. That plan would change if the deal were to collapse.

Spyker's Muller has said his company wanted Saab so it can share product development costs, tap Saab's dealer network and cut the cost of making each vehicle. Saab has 218 stores in the United States, and GM's Smith said today he didn't know whether Spyker intends to keep all of its U.S. dealers.

The new Saab Spyker company will take over all warranty work, although GM will help with the transition so no customers are affected, said Scott Mackie, GM's vice president for new business development and strategic alliances.

In addition, GM will provide the new company with powertrain components, finished 9-4X crossovers and some engineering over the next several years, Smith said, without giving more specifics.

Production of the redesigned Saab 9-5 will begin in April, Smith said. Both the 9-5 and the 9-4X will launch in the United States.

Uncertainty hanging over Saab has eroded U.S. sales. In 2009, Saab sold 8,680 units in the United States, down 59 percent from 2008.

At the Automotive News World Congress this month, Muller said Saab can be “very, very profitable,” partially by staying true to its own DNA.

Saab's loyal buyers were sometimes frustrated by the way the Swedish automaker's product looked under GM, he said. “People were interested in buying a ‘Saab' Saab, not an ‘Opel' Saab, for instance,” Muller said.

Spyker -- whose logo bears a Latin phrase that translates, “For the tenacious, no road is impossible” -- jumped into the bidding process after a deal to sell Saab to Swedish supercar maker Koenigsegg Group AB fell through in November.

The Dutch company, which Muller has said will make about 100 cars this year, continued negotiations while GM CEO Ed Whitacre repeatedly said he had no hope of saving Saab.

“It's my job to reverse [GM's] position and make sure that Saab is indeed saved,” Muller told the World Congress.

Muller also said then that he hoped to hire more workers, not fire them. He said he wanted to increase production capacity so the new company can build Saabs along with a higher volume of Spyker vehicles.

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