George S. May Business Blog

Koenigsegg rumored to be buying Saab

Koenigsegg, the Swedish luxury carmaker and some Norwegian investors have signed a letter of intent to purchase Saab, a Swedish unit of General Motors.

Although Saab spokesman Eric Geers would not provide comment on the report, a source familiar with the matter told Reuters that all that was left to be resolved were “minor issues”.

“The deal is there now and a few minor details remain,” said the source, who declined to be identified.

Swedish television channel SVT, citing unnamed sources, reported the deal had been struck after intensive negotiations in Zurich, Switzerland. “Final negotiations about details on the deal will go on in the next months,” SVT said on its website.

Saab Automobile was put up for sale by GM earlier this year and is said to have been in talks with two or three bidders in the past weeks.

The brand, whose sales comprised just over 1 percent of GM’s total sales volume last year, has been hit hard by the economic downturn that has savaged sales on both sides of the Atlantic.

Saab, one of Sweden’s best-known brands, has said it needs $1 billion of financing to help it overhaul production and launch new models while absorbing expected losses of about 3 billion crowns ($370 million) this year.

If managed well, this could prove to be a great move for Saab. Saab, in my opinion, has always had a bit of an identity crisis, as, while the cars are built well and fairly luxurious on the inside, their body styles have always been a bit bland. Koenigsegg has some really cool looking cars and if they were to help Saab come out with a new, more exciting line, I think that will definitely catch more people’s eye and eventually enjoy a boost in their sales.

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