A summary of the terms of the sale

“Saab is an iconic brand. What we can bring to Saab is entrepreneurship and tenacity.” Victor Muller
It’s truly been a dramatic couple of months for Saab, GM and the various bidders for Saab, not to mention all of us on the sidelines observing, pleading and supporting. Truly astounding history, one that I wouldn’t have believed if it had not really happened.
So, one may ask, what actually did happen?
First of all, this is an agreement to sell. The actual sale will not take place until the European Investment Bank loans are in place for the guaranteed 400 million Euros (US$563 million) and the various government agencies and auditors have satisfied themselves that all things are in the right places. Additionally, as was previously reported here and in other outlets, Russian investor Vladimir Antonov’s 29 percent stake in Spyker must be bought out by Victor Muller’s investment company, Tenaci Capital BV. GM expects the deal to be complete in the middle of February.
Second, as I’ve said before in this process, the result for Saab isn’t exactly independence from General Motors, but a status more akin to a semi-autonomous joint venture than independent company. (By joint venture I mean a common undertaking, not necessarily any legal status.)
Why do I say that? As is being widely reported, the total selling price is right at US$500 million. The General gets about $74 million from Spyker and gets to keep about $100 million from Saab’s allocated operating capital, and the difference, about $326 million, is made up of preferred stock in the new company, Saab Spyker Automobiles. If we take the market value to be close to the selling price, General Motors still has a very, very large stake in Saab Spyker Automobiles. Upwards of half of the ownership, in fact. As such, GM still has a participating role in this new venture.
Additionally, Saab Spyker Automobiles will be one of GM’s largest customers. Since every current and future Saab relies upon drive train components made in other GM factories, Saab Spyker Automobiles will be buying those assemblies from GM for some time. In the case of the 9-4x, GM will be the manufacturer of the entire vehicle for distribution by Saab Spyker Automobiles. Saab Spyker needs GM and GM needs Saab Spyker.
Third, and this is strictly conjecture, I imagine that Saab Spyker Automobiles will still need the General Motors service network for at least the short term to serve the Saabs currently on the road. The dealer network will likely change as we saw previously with the KG plan, and Spyker will need GM dealers in the meantime to bridge the gap in service.
Fourth and finally, GM executive John Smith has said that there are “other considerations” due GM in this relationship. What that means, I’ve not a clue, but I suspect that there are non-compete provisions protecting specific GM markets and allowances for rights to Saab-developed technology that will be used in GM cars. There would likely be clauses to cover GM’s costs of dealer support and dealer terminations associated with the change in ownership.
It’s certainly a HUGE step in the right direction!! Great show, folks at Spyker and Saab!!
Sources:
Bloomberg
The Washington Post
Business Week
Wall Street Journal

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