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September 10, 2009

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Home » Business » Auto

Beijing car maker buys stake in Saab bidder

BEIJING Automotive Industry Holding will take a stake in Koenigsegg as part of the Swedish luxury car maker's purchase of General Motors' Saab unit, in the latest push by a Chinese auto firm to secure a global footprint.

The Chinese firm will take a minority stake in Koenigsegg Group, which in turn is bidding to own 100 percent of Saab Automobile, Koenigsegg said in a statement yesterday.

The agreement comes just hours after another Chinese car maker Geely Automotive said its parent wanted to bid for Saab's Swedish rival Volvo Cars Corp, which has been put up for sale by Ford, its United States parent.

"This is an important step on the road toward a new Saab," Koenigsegg Chief Executive Christian von Koenigsegg said in the statement. "We have a well prepared business plan, an important partnership, and we are ready to proceed without state financing."

Koenigsegg, backed by US and Norwegian investors, struck a deal earlier this year with GM to buy the Detroit auto maker's loss-making Saab Automobile business, but questions remained over the financing of the deal.

Koenigsegg said it aimed to finalize the deal later this year and that the Swedish government, from which it hopes to secure state guarantees for loans from the European Investment Bank, had been briefed on the plans.

Further details regarding the deal could not be divulged due to a confidentiality agreement, it added.

"We are now completely convinced that we will be able to complete the deal by the end of October," Saab spokesman Eric Geers said.

Beijing Auto dropped out of the bidding for Opel in July and had been tipped by some as a possible bidder for Ford-owned Volvo Cars.

The auto maker, controlled by the Beijing government, aims to more than double its annual vehicle sales to 2 million units by the end of 2015 from 771,639 units last year.

However, it does not have its own car brand.

Its four-year-old Mercedes-Benz car venture with Daimler AG broke even last year, and its tie-up with Hyundai Motor Co has a long way to go before catching up with top players in the market such as Volkswagen AG.


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