Swedish Automobile, the parent company of automaker Saab, has entered a memo of understanding with Chinese companies Pang Da and Youngman, whereby the Chinese groups will purchase 100 percent of the shares of Saab Automobile and Saab Great Britain. The takeover will prevent Saab for falling into bankruptcy.
The announcement is a big surprise, as earlier this week Saab terminated an agreement with Pang Da and Youngman that would have seen the two Chinese companies buy controlling shares of Saab. The Swedish automaker effectively said no to a takeover offer that would have saved it from the brink of bankruptcy. Today’s announcement makes it clear that Saab’s management had second thoughts.
The new deal reportedly costs the Chinese companies €100 million ($141 million) and will be paid in installments. It is valid through November 15 while Saab remains in restructuring, and hinges on Pang Da and Youngman providing “long term funding to Saab Automobile.”
Saab is still in voluntary reorganization in Sweden. In response to the news about the €100 million takeover offer, the court-appointed administrator of Saab’s reorganization has withdrawn his request that Saab’s restructuring be terminated prematurely.
Michele Tinson, spokeswoman for Saab Cars North America, said that the company has continued to sell cars in the U.S. despite the halt in vehicle production. She said that the takeover is expected to happen on or before November 15. Production lines in Sweden should be able to restart about eight weeks after the takeover bid is completed -- which means Saab may not resume building cars until 2012.
However, Tinson said production of the Saab 9-4X may start before that date. The 9-4X is built at a General Motors factory in Ramos Arizpe, Mexico, which also builds the Cadillac SRX. The factory could resume production of the 9-4X fairly easily, whereas restarting Saab’s assembly lines in Trollhättan, Sweden, will take more time.
The company is not announcing any leadership changes at this time. Victor Muller intends to remain CEO of Saab Automobile AB until a replacement is announced; Tinson said Muller has expressed interest in remaining involved with Saab even if he is replaced.
For now, at least, the lights are still on at Saab. Despite teetering at the edge of bankruptcy for months, it seems the Swedish automaker may survive under Chinese ownership.