BAIC in talks to acquire assets from GM's Saab
By Jui Chakravorty Das and Kevin Krolicki |
December 9, 2009, Wednesday
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Print Edition
Print Edition
GENERAL Motors Co is talking to Beijing Automotive Industry Holding Corp about a partial sale of assets associated with its Saab brand, including tooling and technology, two insiders said yesterday.
BAIC, China's fifth-largest car maker, has made it clear it has no interest in acquiring Saab's production hub in Trollhattan, Sweden, the insiders said.
Under the proposed deal, BAIC, which lacks its own car brand, would set up production in China based on an older generation of Saab vehicles, including the 9-5 and 9-3 models, they said.
The partial sale of Saab technology to BAIC would likely clear the way for a liquidation of other assets held by the brand, including its headquarters and could threaten more than 3,000 Saab jobs in Sweden.
At the same time that GM is talking with BAIC, it is also vetting several other bidders that have expressed an interest in buying all of Saab, the sources said.
BAIC and GM both declined to comment.
BAIC has said it remains interested in Saab, part of a push by Chinese car makers to upgrade their technology and expand production.
GM, which came through a bankruptcy funded by the United States government in July, has said it will not discuss any negotiations on Saab because of confidentiality agreements with potential bidders.
GM's board of directors wants to see that any potential bidder has financing lined up by the end of December and will set a strict time limit for any deal, the sources said.
Although the Swedish government could still intervene to tip the balance, those tough conditions and the fast timetable make it more likely that a partial sale of Saab to BAIC will be the only viable option for GM, one of the sources said.
Saab has been a consistent money-loser for GM during the past 20 years. Saab lost about US$340 million in 2008.
GM's board has said that it will take until the end of December to consider whether it can conclude a deal to sell Saab.
BAIC had been in discussions to provide financing to Koenigsegg, a tiny Swedish car builder that pulled out of a tentative deal to buy Saab last month.
BAIC, China's fifth-largest car maker, has made it clear it has no interest in acquiring Saab's production hub in Trollhattan, Sweden, the insiders said.
Under the proposed deal, BAIC, which lacks its own car brand, would set up production in China based on an older generation of Saab vehicles, including the 9-5 and 9-3 models, they said.
The partial sale of Saab technology to BAIC would likely clear the way for a liquidation of other assets held by the brand, including its headquarters and could threaten more than 3,000 Saab jobs in Sweden.
At the same time that GM is talking with BAIC, it is also vetting several other bidders that have expressed an interest in buying all of Saab, the sources said.
BAIC and GM both declined to comment.
BAIC has said it remains interested in Saab, part of a push by Chinese car makers to upgrade their technology and expand production.
GM, which came through a bankruptcy funded by the United States government in July, has said it will not discuss any negotiations on Saab because of confidentiality agreements with potential bidders.
GM's board of directors wants to see that any potential bidder has financing lined up by the end of December and will set a strict time limit for any deal, the sources said.
Although the Swedish government could still intervene to tip the balance, those tough conditions and the fast timetable make it more likely that a partial sale of Saab to BAIC will be the only viable option for GM, one of the sources said.
Saab has been a consistent money-loser for GM during the past 20 years. Saab lost about US$340 million in 2008.
GM's board has said that it will take until the end of December to consider whether it can conclude a deal to sell Saab.
BAIC had been in discussions to provide financing to Koenigsegg, a tiny Swedish car builder that pulled out of a tentative deal to buy Saab last month.
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